The British State Telegraphs - A Study of the Problem of a Large Body of Civil Servants in a Democracy

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Title: The British State Telegraphs - A Study of the Problem of a Large Body of Civil Servants in a Democracy
Author: Meyer, Hugo Richard
Language: English
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THE BRITISH STATE
TELEGRAPHS

[Illustration: MacMillan Company logo]

THE BRITISH STATE
TELEGRAPHS

A STUDY OF THE PROBLEM OF A LARGE BODY OF
CIVIL SERVANTS IN A DEMOCRACY

HUGO RICHARD MEYER

SOMETIME ASSISTANT PROFESSOR OF POLITICAL ECONOMY IN THE
UNIVERSITY OF CHICAGO, AUTHOR OF "GOVERNMENT
REGULATION OF RAILWAY RATES;" "MUNICIPAL
OWNERSHIP IN GREAT BRITAIN"

New York

THE MACMILLAN COMPANY

LONDON: MACMILLAN & CO., LTD.

1907

_All right reserved_

BY THE MACMILLAN COMPANY

Set up and electrotyped. Published October 1907

THE MASON-HENRY PRESS
SYRACUSE, NEW YORK

TO MY BROTHER

PREFACE

In order to keep within reasonable limits the size of this volume, the
author has been obliged to reserve for a separate volume the story of
the Telephone in Great Britain. The series of books promised in the
Preface to the author's _Municipal Ownership in Great Britain_ will,
therefore, number not four, but five.

CONTENTS

CHAPTER I
INTRODUCTION 3

Scope of the inquiry.

CHAPTER II
THE ARGUMENT FOR THE NATIONALIZATION OF THE TELEGRAPHS 13

The indictment of the telegraph companies. The argument
from foreign experience. The promise of reduced tariffs
and increased facilities. The alleged financial success of
foreign State telegraphs: Belgium, Switzerland and France. The
argument from English company experience.

CHAPTER III
THE ALLEGED BREAK-DOWN OF LAISSEZ-FAIRE 36

Early history of telegraphy in Great Britain. The adequacy of
private enterprise. Mr. Scudamore's loose use of statistics.
Mr. Scudamore's test of adequacy of facilities. Telegraphic
charges and growth of traffic in Great Britain. The alleged
wastefulness of competition. The telegraph companies' proposal.

CHAPTER IV
THE PURCHASE OF THE TELEGRAPHS 57

Upon inadequate consideration the Disraeli Ministry estimates
at $15,000,000 to $20,000,000 the cost of nationalization.
Political expediency responsible for Government's inadequate
investigation. The Government raises its estimate to
$30,000,000; adding that it could afford to pay $40,000,000
to $50,000,000. Mr. Goschen, M. P., and Mr. Leeman, M. P.,
warn the House of Commons against the Government's estimates,
which had been prepared by Mr. Scudamore. The Gladstone
Ministry, relying on Mr. Scudamore, estimates at $3,500,000
the "reversionary rights" of the railway companies, for which
rights the State ultimately paid $10,000,000 to $11,000,000.

CHAPTER V
NONE OF MR. SCUDAMORE'S FINANCIAL FORECASTS WERE REALIZED 77

The completion of the telegraph system costs $8,500,000;
Mr. Scudamore's successive estimates had been respectively
$1,000,000 and $1,500,000. Mr. Scudamore's brilliant forecast
of the increase of traffic under public ownership. Mr.
Scudamore's appalling blunder in predicting that the State
telegraphs would be self-supporting. Operating expenses on the
average exceed 92.5% of the gross earnings, in contrast to
Mr. Scudamore's estimate of 51% to 56%. The annual telegraph
deficits aggregate 26.5% of the capital invested in the plant.
The financial failure of the State telegraphs is not due to
the large price paid to the telegraph companies and railway
companies. The disillusionment of an eminent advocate of
nationalization, Mr. W. Stanley Jevons.

CHAPTER VI
THE PARTY LEADERS IGNORE THEIR FEAR OF AN ORGANIZED CIVIL
SERVICE 94

Mr. Disraeli, Chancellor of the Exchequer, opposes the
enfranchisement of the civil servants. Mr. Gladstone, Leader
of the Opposition, assents to enfranchisement, but expresses
grave apprehensions of evil results.

CHAPTER VII
THE HOUSE OF COMMONS IS RESPONSIBLE FOR THE FINANCIAL FAILURE OF
THE STATE TELEGRAPHS 99

Sir S. Northcote, Chancellor of the Exchequer in Mr.
Disraeli's Ministry of 1874 to 1880, is disillusioned. The
State telegraphs become self-supporting in 1879-80. The House
of Commons, under the leadership of Dr. Cameron, M. P., for
Glasgow, overrides the Ministry and cuts the tariff almost in
two. In 1890-91 the State telegraphs would again have become
self-supporting, had not the House of Commons, under pressure
from the civil service unions, increased wages and salaries.
The necessity of making money is the only effective incentive
to sound management.

CHAPTER VIII
THE STATE TELEGRAPHS SUBSIDIZE THE NEWSPAPER PRESS 113

Why the newspaper press demanded nationalization. Mr.
Scudamore gives the newspaper press a tariff which he deems
unprofitable. Estimates of the loss involved in transmitting
press messages, made by responsible persons in the period from
1876 to 1900. The State telegraphs subsidize betting on horse
races.

CHAPTER IX
THE POST OFFICE EMPLOYEES PRESS THE HOUSE OF COMMONS FOR INCREASES
OF WAGES AND SALARIES 127

British Government's policy as to wages and salaries for
routine work, as distinguished from work requiring a high
order of intelligence. The Fawcett revision of wages, 1881.
Lord Frederick Cavendish, Financial Secretary to the Treasury,
on pressure exerted on Members of Parliament by the telegraph
employees. Sir S. A. Blackwood, Permanent Secretary to the
Post Office, on the Fawcett revision of 1881. Evidence as to
civil servants' pressure on Members of Parliament presented
to the Royal Commission on Civil Establishments, 1888. The
Raikes revision of 1890-91; based largely on the Report of the
Committee on the Indoor Staff, which Committee had recommended
increases in order "to end agitation." The Earl Compton, M.
P., champions the cause of the postal employees in 1890; and
moves for a Select Committee in 1891. Sir James Fergusson,
Postmaster General in the Salisbury Ministry, issues an
order against Post Office servants "endeavoring to extract
promises from any candidate for election to the House of
Commons with reference to their pay or duties." The Gladstone
Ministry rescinds Sir James Fergusson's order. Mr. Macdonald's
Motion, in 1893, for a House of Commons Select Committee. Mr.
Kearley's Motion, in 1895. The Government compromises, and
appoints the so-called Tweedmouth Inter-Departmental Committee.

CHAPTER X
THE TWEEDMOUTH COMMITTEE REPORT 165

The Government accepts all recommendations made by the
Committee. Sir Albert K. Rollit, one of the principal
champions in the House of Commons of the postal employees,
immediately follows with a Motion "intended to reflect
upon the Report of the Tweedmouth Committee." Mr. Hanbury,
Financial Secretary to the Treasury, intimates that it
may become necessary to disfranchise the civil servants.
The Treasury accepts the recommendations of the so-called
Norfolk-Hanbury Committee. The average of expenses on account
of wages and salaries rises from 11.54 cents per telegram
in 1895-96, to 13.02 cents in 1902-03, concomitantly with
an increase in the number of telegrams from 79,423,000 to
92,471,000.

CHAPTER XI
THE POST OFFICE EMPLOYEES CONTINUE TO PRESS THE HOUSE OF COMMONS
FOR INCREASES OF WAGES AND SALARIES 182

The Post Office employees demand "a new judgment on the
old facts." Mr. S. Woods' Motion, in February, 1898. Mr.
Steadman's Motions in February and June, 1899. Mr. Hanbury,
Financial Secretary to the Treasury, points out that the
postal employees are demanding a House of Commons Select
Committee because under such a Committee "the agitation and
pressure, now distributed over the whole House, would be
focussed and concentrated upon the Select Committee." Mr.
Steadman's Motion, in April, 1900. Mr. Bayley's Motion, in
June, 1901. Mr. Balfour, Prime Minister, confesses that the
debate has filled him "with considerable anxiety as to the
future of the public service if pressure of the kind which
has been put upon the Government to-night is persisted in
by the House." Captain Norton's Motion, in April, 1902. The
Government compromises by appointing the Bradford Committee
of business men. Mr. Austen Chamberlain, Postmaster General,
states that Members from both sides of the House "seek from
him, in his position as Postmaster General, protection for
them in the discharge of their public duties against the
pressure sought to be put upon them by employees of the Post
Office." He adds: "Even if the machinery by which our Select
Committees are appointed were such as would enable us to
secure a Select Committee composed of thoroughly impartial
men who had committed themselves by no expression of opinion,
I still think that it would not be fair to pick out fifteen
Members of this House and make them marked men for the purpose
of such pressure as is now distributed more or less over the
whole Assembly."

CHAPTER XII
THE BRADFORD COMMITTEE REPORT 214

The Bradford Committee ignores its reference. It recommends
measures that would cost $6,500,000 a year, in the hope of
satisfying the postal employees, who had asked for $12,500,000
a year. Lord Stanley, Postmaster General, rejects the Bradford
Committee's Report; but grants increases in wages aggregating
$1,861,500 a year.

CHAPTER XIII
THE HOUSE OF COMMONS SELECT COMMITTEE ON POST OFFICE SERVANTS,
1906 226

The Post Office Civil Servants' Unions demand the adoption
of the Bradford Committee Report. Lord Stanley, Postmaster
General, applies the words "blackmail" and "blood-sucking"
to the postal employees' methods. Captain Norton moves for a
House of Commons Select Committee. Mr. Austen Chamberlain,
Chancellor of the Exchequer, in vain asks the Opposition
Party's support for a Select Committee to which shall be
referred the question of the feasibility of establishing a
permanent, non-political Commission which shall establish
general principles for settling disputes between the civil
servants and the Government of the day. Captain Norton's
Motion is lost, nine Ministerial supporters voting for it, and
only two Opposition members voting against it. Mr. J. Henniker
Heaton's appeal to the British public for "An End to Political
Patronage." The Post Office employees, in the campaign
preceding the General Election of January, 1906, induce nearly
450 of the 670 parliamentary candidates who succeeded in being
elected, to pledge themselves to vote for a House of Commons
Select Committee on Post Office Wages. Immediately upon the
opening of Parliament, the Sir H. Campbell-Bannerman Liberal
Ministry gives the Post Office employees a House of Commons
Select Committee.

CHAPTER XIV
THE HOUSE OF COMMONS, UNDER PRESSURE FROM THE CIVIL SERVICE UNIONS,
CURTAILS THE EXECUTIVE'S POWER TO DISMISS INCOMPETENT AND REDUNDANT
EMPLOYEES 245

The old practice of intervention by Members of Parliament on
behalf of individual civil servants with political influence
has given way to the new practice of intervention on behalf
of the individual civil servant because he is a member of a
civil service union. The new practice is the more insidious
and dangerous one, for it means class bribery. The doctrine
that entrance upon the State's service means "something very
nearly approaching to a freehold provision for life." Official
testimony of various prominent civil servants, especially of
Mr. (now Lord) Welby, Permanent Secretary to the Treasury
from 1885 to 1894; and Mr. T. H. Farrer, Permanent Secretary
to Board of Trade from 1867 to 1886. The costly practice of
giving pensions no solution of the problem of getting rid of
unsatisfactory public servants.

CHAPTER XV
THE HOUSE OF COMMONS, UNDER PRESSURE FROM THE CIVIL SERVICE UNIONS,
CURTAILS THE EXECUTIVE'S POWER TO PROMOTE EMPLOYEES ACCORDING TO
MERIT 267

The civil service unions oppose promotion by merit, and
demand promotion by seniority. Testimony presented before:
Select Committee on Civil Services Expenditure, 1873; Select
Committee on Post Office, 1876; Royal Commission to inquire
into the Civil Establishments, 1888; from statement made in
House of Commons, in 1887, by Mr. Raikes, Postmaster General;
and before the so-called Tweedmouth Committee, 1897. Instances
of intervention by Members of House of Commons on behalf of
civil servants who have not been promoted, or are afraid they
shall not be promoted.

CHAPTER XVI
MEMBERS OF THE HOUSE OF COMMONS INTERVENE ON BEHALF OF PUBLIC
SERVANTS WHO HAVE BEEN DISCIPLINED 302

Evidence presented before: The Royal Commission appointed
to inquire into the Civil Establishments, 1888; and the
Tweedmouth Committee, 1897. Instances of intervention by
Members of Parliament. Mr. Austen Chamberlain, Financial
Secretary to the Treasury, in April, 1902, states that
at a low estimate one-third of the time of the highest
officials in the Post Office is occupied with petty questions
of discipline and administrative detail, because of the
intervention of Members of Parliament. He adds that it is
"absolutely deplorable" that time and energy that should be
given to the consideration of large questions must be given
to matters that "in any private business would be dealt with
by the officer on the spot." Sir John Eldon Gorst's testimony
before the Committee on National Expenditure, 1902.

CHAPTER XVII
THE SPIRIT OF THE CIVIL SERVICE 323

The doctrine of an "implied contract" between the State
and each civil servant, to the effect that the State may
make no change in the manner of administering its great
trading departments without compensating every civil servant
however remotely or indirectly affected. The hours of
work may not be increased without compensating every one
affected. Administrative "mistakes" may not be corrected
without compensating the past beneficiaries of such
mistakes. Violation of the order that promotion must not
be mechanical, or by seniority alone, may not be corrected
without compensating those civil servants who would have
been benefitted by the continued violation of the aforesaid
order. The State may not demand increased efficiency of its
servants without compensating every one affected. Persons
filling positions for which there is no further need, must
be compensated. Each civil servant has a "vested right" to
the maintenance of such rate of promotion as obtains when he
enters the service, irrespective of the volume of business or
of any diminution in the number of higher posts consequent
upon administrative reforms. The telegraph clerks demand that
their chances of promotion be made as good as those of the
postal clerks proper, but they refuse to avail themselves of
the opportunity to pass over to the postal side proper of the
service, on the ground that the postal duties proper are
more irksome than the telegraph duties. Members of Parliament
support recalcitrant telegraph clerks whom the Government is
attempting to force to learn to perform postal duties, in
order that it may reap advantage from having combined the
postal service and the telegraphs in 1870. Special allowances
may not be discontinued; and vacations may not be shortened,
without safeguarding all "vested interests." Further
illustrations of the hopelessly unbusinesslike spirit of the
rank and file of the public servants.

CHAPTER XVIII
THE HOUSE OF COMMONS STANDS FOR EXTRAVAGANCE 360

Authoritative character of the evidence tendered by the
several Secretaries of the Treasury. Testimony, in 1902, of
Lord Welby, who had been in the Treasury from 1856 to 1894.
Testimony of Sir George H. Murray, Permanent Secretary to the
Post Office and sometime Private Secretary to the late Prime
Minister, Mr. Gladstone. Testimony of Sir Ralph H. Knox, in
the War Office since 1882. Testimony of Sir Edward Hamilton,
Assistant Secretary to the Treasury since 1894. Testimony of
Mr. R. Chalmers, a Principal Clerk in the Treasury; and of
Sir John Eldon Gorst. Mr. Gladstone's tribute to Joseph Hume,
the first and last Member of the House of Commons competent
to criticize effectively the details of expenditure of the
State. Evidence presented before the Select Committee on Civil
Services Expenditure, 1873.

CHAPTER XIX
CONCLUSION 378

INDEX 393

THE BRITISH STATE TELEGRAPHS

CHAPTER I

INTRODUCTION

SCOPE OF THE INQUIRY

The story of the British State Telegraphs divides itself into two
parts: the purchase of the telegraphs, in 1870, from the companies
that had established the industry of telegraphy; and the subsequent
conduct of the business of telegraphy by the Government. The first
part is covered by Chapters II to VI; the second part by the remaining
chapters. Both parts contain a record of fact and experience that
should be of service to the American public at the present moment, when
there is before them the proposal to embark upon the policy of the
municipal ownership and operation of the so-called municipal public
service industries. The second part, however, will interest a wider
body of readers than the first part; for it deals with a question that
is of profound interest and importance at all times--the problem of a
large body of civil servants in a Democracy.

Chapters II to VI tell of the demand of the British Chambers of
Commerce, under the leadership of the Chamber of Commerce of Edinburgh,
for lower charges on telegraphic messages; the appointment by the
Government of Mr. Scudamore, Second Secretary of the Post Office,
to report upon the relative merits of private telegraphs and State
telegraphs; the character of the report submitted by Mr. Scudamore; and
the reasons why that report--upon which rested the whole argument for
nationalization--was not adequately considered either by the Select
Committee of the House of Commons, to whom the Bill for the purchase
of the telegraphs was referred, or by the House of Commons itself. The
principal reason was that the agitation carried on by the Chambers of
Commerce and the newspaper press[1] proved so successful that both
political parties committed themselves to nationalization before Mr.
Scudamore's report had been submitted to searching criticism. Under
the circumstances, the Disraeli Ministry was unwilling to go into the
general election of 1868 without having made substantial progress
toward the nationalization of the telegraphs. In order to remove
opposition to its Bill in the House of Commons, the Disraeli Ministry
conceded practically everything asked by the telegraph companies, the
railway companies and the newspaper press.[2] The result was that the
Government paid a high price absolutely for the telegraphs. Whether
the price was too high, relatively speaking, is difficult to say. In
the first place, the price paid--about $40,000,000--was well within
the sum which the Government had said it could afford to pay, to
wit, $40,000,000 to $50,000,000. In the second place, the Government
acquired an industry "ready-made," with an established staff of
highly trained men educated in the school of competition--the only
school that thus far has proved itself capable of bringing out the
highest efficiency that is in men. In the second place, the Government
acquired the sole right to transmit messages by electricity--a right
which subsequent events have proved to cover all future inventions,
such as the transmission of messages by means of the telephone and
of wireless telegraphy. Finally, in spite of the wastefulness that
characterized the Government's operation of the telegraphs from the
day the telegraphs were taken over, the Telegraph Department in the
year 1880-81 became able to earn more than the interest upon the
large capital invested in the telegraphs. But from that year on the
Government not only became more and more wasteful, but also lost
control over the charges made to the public for the transmission of
messages. It is instructive to note, in this latter connection, that
the control over the rates to be charged to the public was taken out
of the hands of the Government by Dr. Cameron, who represented in
the House of Commons the people of Glasgow, and that another Scotch
city, Edinburgh, had initiated and maintained the campaign for the
nationalization of the telegraphs.

One of the most extraordinary of the astounding incidents of the
campaign and negotiations that resulted in the purchase of the
telegraphs, was the fact that in the debates in the House of Commons
was not even raised the question of the possibility of complications
and dangers arising out of the multiplication of the civil servants.
That fact is the more remarkable, since the leaders of both political
parties at the time apprehended so much danger from the existing civil
servants that they refused to take active steps to enfranchise the
civil servants employed in the so-called revenue departments--the
customs, inland revenue and Post Office departments--who had been
disfranchised since the close of the Eighteenth Century. The Bill of
1868, which gave the franchise to the civil servants in question, was
a Private Bill, introduced by Mr. Monk, a private Member of the House
of Commons; and it was carried against the protest of the Disraeli
Ministry, and without the active support of the leading men in the
Opposition.

In the debates upon Mr. Monk's Bill, Mr. Gladstone, sitting in
Opposition, said he was not afraid that either political party ever
would try to use the votes of the civil servants for the purpose of
promoting its political fortunes, "but he owned that he had some
apprehension of what might be called class influence in the House of
Commons, which in his opinion was the great reproach of the Reformed
Parliament, as he believed history would record. Whether they were
going to emerge into a new state of things in which class influence
would be weaker, he knew not; but that class influence had been in many
things evil and a scandal to them, especially for the last fifteen or
twenty years [since the Reform of Parliament]; and he was fearful of
its increase in consequence of the possession of the franchise, through
the power which men who, as members of a regular service, were already
organized, might bring to bear on Members of Parliament."

Chapters VII and following show that Mr. Gladstone's apprehensions
were well-founded; that the civil servants have become a class by
themselves, with interests so widely divergent from the interests of
the rest of the community that they do not distribute their allegiance
between the two great political parties on the merits of the respective
policies of those parties, as do an equal number of voters taken at
random. The civil servants have organized themselves in great civil
service unions, for the purpose of promoting their class interests
by bringing pressure to bear upon the House of Commons. At the
parliamentary elections they tend to vote solidly for the candidate who
promises them most. In one constituency they will vote for the Liberal
candidate, in another for the Conservative candidate.

Thus far neither Party appears to have made an open or definite
alliance with the civil servants. But in the recent years in which
the Conservative Party was in power, and year after year denied--"on
principle" of public policy--certain requests of the civil servants,
the rank and file, as well as some of the minor leaders of the Liberal,
or Opposition Party, evinced a strong tendency to vote rather solidly
in the House of Commons in support of those demands of the civil
servants.[3] At the same time the chiefs of the Liberal, or Opposition
Party, refrained from the debate as well as from the vote. It may be
that the Opposition Party discipline was not strong enough to enable
the Opposition chiefs to prevent the votes on the momentous issue
raised in the House of Commons by the civil servants from becoming for
all practical purposes Party votes; or, it may be that the Liberal
Party leaders did not deem it expedient to seek to control the voting
of their followers. Be that as it may, the fact remains that the
Conservative Ministry that was in power, repeatedly called in vain upon
the House of Commons to take out of the field of Party politics the
issue raised by the civil servants in the period from 1890 to 1905.
The Conservative Ministry year after year denied the request of the
Post Office employees for a House of Commons Select Committee on the
pay and position of the Post Office employees. On the other hand, the
support of that request came steadily from the Liberal Opposition.
In the General Election of January, 1906, the Post Office employees
threw their weight overwhelmingly on the side of the Liberal Party;
and immediately after the opening of the new Parliament, the newly
established Liberal Government announced that it would give the Post
Office employees the House of Commons Select Committee which the late
Conservative Ministry had "on principle" of public policy refused to
grant.

Shortly after the General Election of January, 1906, the President
of the Postal Telegraph Clerks' Association, a powerful political
organization, stated that nearly 450 of the 670 Members of the House of
Commons had pledged themselves, in the course of the campaign, to vote
for a House of Commons Select Committee. At about the same time, Lord
Balcarres, a Conservative whip in the late Balfour ministry, speaking
of the 281 members who entered Parliament for the first time in 1906,
said "he thought he was fairly accurate when he said that they had
given pretty specific pledges upon this matter [of a Select Committee]
to those who had sent them to the House." Sir Acland-Hood, chief whip
in the late Balfour Ministry, added: "... nearly the whole of the
supporters of the then [1905] Government voted against the appointment
of the Select Committee [in July, 1905]. No doubt many of them suffered
for it at the general election; they either lost their seats or had
their majorities reduced in consequence of the vote." And the new
Prime Minister, Sir H. Campbell-Bannerman, spoke of the "retroactive
effect of old promises extracted in moments of agony from candidates
at the general election." And finally, at the annual conference of the
Postal Telegraph Clerks' Association, held in March, 1906, Mr. R. S.
Davis, the representative of the Metropolitan London Telegraph Clerks,
said: "The new Postmaster General had made concessions which had
almost taken them [the postal clerks] off their feet by the rapidity
with which one had succeeded another and the manner in which they were
granted."

* * * * *

Chapters XIV to XVII describe the efforts made by the civil servants
to secure exemption from the ordinary vicissitudes of life, as well
as exemption from the necessity of submitting to those standards of
efficiency and those rules of discipline which prevail in private
employment. They show the hopelessly unbusinesslike spirit of the rank
and file of the public servants, a spirit fostered by the practice of
members of the House of Commons intervening, from the floor of the
House as well as behind the scenes, on behalf of public servants who
have not been promoted, have been disciplined or dismissed, or, have
failed to persuade the executive officers to observe one or more of the
peculiar claims of "implied contract" and "vested right" which make
the British public service so attractive to those men whose object in
life is not to secure full and untrammeled scope for their abilities
and ambitions, but a haven of refuge from the ordinary vicissitudes
of life. Members of the House of Commons intervene, in the manner
indicated, in mere matters of detail of administration, because they
have not the courage to refuse to obey the behests of the political
leaders of the civil service unions; they do not so interfere from
the mere desire to promote their political fortunes by championing
the interests of a class. They recognize the fact that the art of
government is the art of log-rolling, of effecting the best compromise
possible, under the given conditions of political intelligence and
public spirit, between the interests of a class and the interests of
the country as a whole. Their views were forcibly expressed, on a
recent occasion, by Captain Norton, who long has been one of the most
aggressive champions in the House of Commons, of the civil servants,
and who, at present, is a Junior Lord of the Treasury, in the Sir H.
Campbell-Bannerman Liberal Ministry. Said Captain Norton: "As regarded
what had been said about undue influence [being exercised by the civil
servants], his contention was that so long as the postal officials ...
were allowed to maintain a vote, they had precisely the same rights as
all other voters in the country to exercise their fullest influence in
the defense of their rights, privileges and interests. He might mention
that all classes of all communities, of all professions, all trades,
all combinations of individuals, such as anti-vaccinationists and so
forth, had invariably used their utmost pressure in defense of their
interests and views upon members of the House...."

The problem of government in every country--irrespectively of the form
which the political institutions may take in any given country--is to
avoid class legislation, and to make it impossible for any one class to
exploit the others. Some of us--who are old-fashioned and at present
in the minority--believe that the solution of that problem is to be
found only in the upbuilding of the character and the intelligence of
the individual citizen. Others believe that it is to be found largely,
if not mainly, in extending the functions of the State and the City.
To the writer, the experience of Great Britain under the experiment
of the extension of the functions of the State and the City, seems
to teach once more the essential soundness of the doctrine that the
nation that seeks refuge from the ills that appear under the policy of
_laissez-faire_, seeks refuge from such ills in the apparently easy,
and therefore tempting, device of merely changing the form of its
political institutions and political ideals, will but change the form
of the ills from which it suffers.

FOOTNOTES:

[1] The reason for the opposition of the newspaper press to the
telegraph companies is discussed in Chapter VIII.

[2] The concession made to the newspaper press is described in Chapter
VIII.

[3] The efforts of the civil servants culminated in the debate and vote
of July 5, 1905. Upon that occasion there voted for the demands of the
civil servants eighteen Liberalists who, in 1905-6, became Members
of the Sir H. Campbell-Bannerman Liberal Ministry. Two of them, Mr.
Herbert Gladstone and Mr. Lloyd George, became Members of the Cabinet,
or inner circle of the Ministry.

CHAPTER II

THE ARGUMENT FOR THE NATIONALIZATION OF THE TELEGRAPHS

In 1856 the Chambers of Commerce of Great Britain, under the leadership
of the Chamber of Commerce of Edinburgh, began an agitation for the
purchase by the Government of the properties of the several British
telegraph companies. In 1865, the telegraph companies, acting in
unison, withdrew the reduced rate of twenty-four cents for twenty
words, address free, that had been in force, since 1861, between
certain large cities. That action, which will be described further on,
caused the Chambers of Commerce to increase the agitation for State
purchase. In September, 1865, Lord Stanley of Alderley, Postmaster
General, commissioned Mr. F. I. Scudamore, Second Secretary of the
Post Office, "to inquire and report whether, in his opinion, the
electric telegraph service might be beneficially worked by the Post
Office--whether, if so worked, it would possess any advantages over
a system worked by private companies--and whether it would entail
any very large expenditure on the Post Office Department beyond the
purchase of existing rights."

In July, 1866, Mr. Scudamore reported, recommending the purchase
of the telegraphs. In February, 1868, he submitted a supplementary
report; and in 1868 and 1869, he acted as the chief witness for the
Government before the Parliamentary Committees appointed to report on
the Government's Bills proposing to authorize the State to acquire
and operate the telegraphs.[4] The extent to which the Government,
throughout the considerations and negotiations which finally ended in
the nationalization of the telegraphs, relied almost exclusively upon
evidence supplied by Mr. Scudamore, is indicated in the statement made
by the Chancellor of the Exchequer, Mr. G. W. Hunt, on July 21, 1868,
that Mr. Scudamore "might be said to be the author of the Bill to
acquire the telegraphs."[5]

[Sidenote: _Indictment of the Telegraph Companies_]

Mr. Scudamore reported that the Chambers of Commerce, and the various
writers in the periodical and newspaper press who had supported the
proposal of State purchase, had concurred in the following general
propositions: "that the charges made by the telegraph companies were
too high, and tended to check the growth of telegraphic correspondence;
that there were frequent delays of messages; that many important
districts were unprovided with telegraphic facilities; that in many
places the telegraph office was inconveniently remote from the centre
of business, and was open for too small a portion of the day; that
little or no improvement could be expected so long as the working of
the telegraphs was conducted by commercial companies striving chiefly
to earn a dividend and engaged in wasteful competition with each other;
and, finally, that the growth of telegraphic correspondence had been
greatly stimulated in Belgium and Switzerland by the annexation of the
telegraphs to the Post Offices of those countries, and the consequent
adoption of a low scale of charges; and that in Great Britain like
results would follow the adoption of like means, and that from the
annexation of the British telegraphs to the British Post Office there
would accrue great advantage to the public, and ultimately a large
revenue to the State." Subsequently, before the Select Committees of
Parliament, Mr. Scudamore maintained that in the hands of the State the
telegraphs would pay from the start.

Mr. Scudamore continued his report with the statement that he had
satisfied himself that in Great Britain the telegraph was not in
such general use as upon the Continent; that "the class who used the
telegraphs most freely were stock brokers, mining agents, ship brokers,
Colonial brokers, racing and betting men, fruit merchants and others
engaged in business of a speculative character, or who deal in articles
of a perishable nature. Even general merchants used the telegraphs
comparatively little, compared with those engaged in the more
speculative branches of commerce." He added that from 1862 to 1868 the
annual increase in the number of telegraphic messages had ranged pretty
evenly from 25 per cent. to 30 per cent., indicating merely a gradual
increase in the telegraphic correspondence of those classes who had
been the first to use the telegraphs. He said there had been none of
those "sudden and prodigious jumps" that had occurred on the Continent
after each reduction in the charges for telegraphic messages, or after
each extension of the telegraph system to the smaller towns.

Mr. Scudamore held that it was a serious indictment of the manner
in which the telegraph companies had discharged their duties to the
public, that the small tradesman had not learned to order goods by
telegraph, and had not thereby enabled himself to get along with a
smaller stock of goods kept constantly on hand; that the fishing
villages on the remote coasts of Scotland that had no railways, had no
telegraphs; that the public did not send "millions of messages" of this
kind: "I shall not be home to dinner;" "I will bring down some fish;"
"You can meet me at four;" and that the wife and children, away from
their home in the country village, did not telegraph to the husband and
father: "Send me a money order." Mr. Scudamore's notions of the uses to
which the telegraphs ought to be put were shared by the Chancellor of
the Exchequer, Mr. Hunt, who looked forward to the day when "persons
who have a difficulty in writing letters will have less difficulty in
going to a telegraph office and sending a message to a friend than
writing a letter."[6]

[Sidenote: _Argument from Foreign Experience_]

Mr. Scudamore supported his position with the subjoined reports from
countries in which the State operated the telegraphs. The Danish
Government had reported that the telegraph was used by merchants
generally and for social and domestic purposes. Prussia had reported
that in the early days, when the charges had been high, the use of the
telegraph had been confined almost exclusively to bankers, brokers,
large commercial houses and newspaper correspondents, but that with
each reduction in the charges, or extension of the telegraphs to small
towns, the number of those who regularly sent out and received messages
had increased considerably. Switzerland had reported that messages
relating to personal business and family affairs formed as important
a part of the whole traffic as the messages of banking interests and
other trading interests.

France had reported that 38 per cent. of the messages related to
personal business and family affairs; and Belgium had reported that
nearly 59 per cent. of the messages related to personal business and
family affairs.

To indicate the manner in which the use of the telegraph increased
with reductions in the charges made, Mr. Scudamore reported that in
Belgium, in 1863, a reduction of 33 per cent. in the charge had been
followed by an increase of 80 per cent. in the number of telegrams;
and that, in 1866, a reduction of 50 per cent. in the charges had been
followed by an increase of 85 per cent. in the traffic. In France, in
1862, a reduction of 35 per cent. in the charge, had led to an increase
of 64 per cent. in the number of messages. In Switzerland, in 1868, a
reduction of 50 per cent. in the charge had been followed, in the next
three months, by an increase in business of 90 per cent. In Prussia,
in 1867, a reduction of the charge by 33 per cent. had, in the first
month, increased the number of messages by 70 per cent. The increase in
business always had followed immediately, said Mr. Scudamore, showing
that new classes of people took up the use of the telegraphs.

Finally, Mr. Scudamore stated that in 1866, the proportion borne by the
total of telegrams sent to the aggregate of letters sent, had been:
in Belgium, one telegram for every 37 letters; in Switzerland, one
telegram for every 69 letters; and in the United Kingdom, one telegram
for every 121 letters. The relative failure of the people of the United
Kingdom to use the telegraph freely, Mr. Scudamore ascribed to the
high charges made by the telegraph companies, and to the restricted
facilities offered by the companies.

In 1868, the British companies were charging 24 cents for a twenty-word
message, over distances not exceeding 100 miles; 36 cents for distances
between 100 and 200 miles; and 48 cents for distances exceeding 200
miles. For messages passing between Great Britain and Ireland, the
charge ranged from $0.72 to $1.44. In all cases the addresses of the
sender and of the sendee were carried free.

[Sidenote: _Promise of Lower Charges and Better Service_]

The Government proposed to make a uniform charge of 24 cents for twenty
words, irrespective of distance. Mr. Scudamore stated that he fully
expected that in two or three years the Government would reduce its
charge to 12 cents. The only reason why the Government did not propose
to adopt immediately the last mentioned rate, was the desire not to
overcrowd the telegraphs at the start before there had been the chance
to learn with what volume of traffic the existing plant and staff could
cope.[7]

In 1868 there was in the United Kingdom one telegraph office for
every 13,000 people. The Government promised to inaugurate the
nationalization of the telegraphs by giving one office for every 6,000
people.[8]

In the shortest time possible, the Government would open a telegraph
office at every money order issuing Post Office. At that time the
practice was to establish a money order office wherever there was the
prospect of two money orders being issued a day; and in some instances
such offices were established on the prospect of one order a day.

The contention that the public interest demanded a great increase in
the number of telegraph offices, Mr. Scudamore supported by citing
the number of offices in Belgium and France. In the former country
there were upward of 125 telegraph offices which despatched less than
one telegram a day. In fact, some offices despatched less than one a
month. The Belgium Government, in figuring the cost of the Telegraph
Department, charged that Department nothing whatever for office rent,
or for fire, light and office fittings; nor did it charge the smaller
offices anything for the time given by the State Railway employees and
the postal employees to the Telegraph Department. In France there were
301 telegraph offices that took in less than $40 a year; 179 offices
that took in from $40 to $100; and 185 offices that took in from $100
to $200.

Mr. Scudamore over and again assured the Parliamentary Select
Committee of 1868 that the telegraphs in the hands of the State would
be self-supporting from the start, and that ultimately they would be
a considerable source of revenue. But he supported his indictment
of the telegraph companies of the United Kingdom by drawing upon
the experience of the State telegraphs of Belgium, Switzerland, and
France, under very low rates on inland telegrams, as distinguished
from telegrams in transit, or telegrams to and from foreign countries.
In taking that course, Mr. Scudamore ignored the fact that the inland
rates in question were not remunerative.

[Sidenote: _Belgium's Experience_]

The Belgium State telegraphs had been opened in 1850. In the years
1850 to 1856, they had earned, upon an average, 36.8 per cent. a year
upon their cost. In the period 1857 to 1862, they had earned, upon an
average, 24.3 per cent. In 1863 to 1865, the annual earnings fell to an
average of 13.5 per cent.; and in 1866 to 1869, they reached an average
of 2.8 per cent. only. The reasons for that rapid and steady decline of
the net earnings were: the opening of relatively unprofitable lines and
offices; increases in wages which the Government could not withhold;
a slackening in the rate of growth of the profits on the so-called
foreign messages and transit messages; and a rapid increase in the
losses upon the inland messages, which were carried at low rates for
the purpose of stimulating traffic.

At an early date the Belgium Government concluded that the first three
of the four factors just enumerated were beyond the control of the
State, and therefore permanent. It resolved, therefore, to attempt to
neutralize them by developing the inland traffic to such proportions
that it should become a source of profit, that traffic having been, up
to that time, a source of loss. Accordingly, on January 1st, 1863, the
Government lowered the charge on inland messages from 30 cents for 20
words, addresses included, to 20 cents. As that reduction did not prove
sufficiently effective, the charge on inland messages was reduced, on
December 1st, 1865, to 10 cents for 20 words. Under that reduction the
loss incurred upon the inland messages rose from an annual average of
$13,800 in 1863 to 1865, to an annual average of $59,500 in 1866 to
1869; and the average annual return upon the capital invested fell to
2.8 per cent. This evidence was before Mr. Scudamore when he argued
from the experience of Belgium in favor of a uniform rate, irrespective
of distance, of 24 cents for 20 words, not counting the addresses. Mr.
Scudamore shared the opinion of the Belgium Government that the rate of
10 cents would so stimulate the traffic as to become very profitable.
As a matter of fact, things went from bad to worse in Belgium, and
for many years the Belgian State telegraphs failed to earn operating
expenses.[9]

By way of explanation it should be added that the so-called transit
messages and foreign messages were profitable for two reasons. In
the first place, the Belgian Government kept high the rates on those
messages. In the second place, those messages are carried much more
cheaply than inland messages. The transit messages, say from Germany
to England, have only to be retransmitted; they are not received
across the counter, nor are they delivered across the counter and by
messenger. The foreign messages are burdened with only one of the two
foregoing relatively costly operations. In 1866 the Belgian Government
stated that, if the cost to the Telegraph Department of a given number
of words transmitted as a message in transit be represented by two, the
corresponding cost of the same number of words received and transmitted
as a foreign message would be represented by three, while the cost of
the same number of words received and transmitted as an inland message
would be represented by five.

[Sidenote: _Swiss Experience_]

The Swiss State telegraphs, the experience of which Mr. Scudamore also
cited in support of his Report, were opened in 1852; and in the period
from 1854 to 1866 they earned, on an average, 18 per cent. upon their
cost. Throughout that period the average receipts per inland messages
were 21 cents, and the average receipts per foreign message were 39
cents. In the year 1865 the average receipts per message were 21 cents
for inland messages, and 30 cents for foreign and transit messages,
which constituted 39 per cent. of the traffic. In the following year,
1866, the average receipts upon the inland traffic remained unchanged;
while those upon the foreign and transit traffic, 43 per cent. of the
total traffic, fell to 20 cents. This reduction of 33 per cent. in the
average receipts upon the foreign and transit traffic, caused a decline
of 45 per cent. in the total net receipts, and reduced the earnings
upon the capital from 15.2 per cent. in 1865, to 7.5 per cent. in 1866.

Thus far the receipts from the inland messages had not covered the
operating expenses incurred on account of those messages. The profits,
which had been very large, had come from the foreign messages and
messages in transit.[10] The Government, alarmed at the decline in
profits resulting from the fall in the average receipts per message
in the foreign and transit traffic, resolved upon a special effort to
stimulate the growth of the inland traffic. Accordingly, on January
1st, 1868, it lowered the rates on inland messages of 20 words, address
counted, from 20 cents to 10 cents. The inland traffic immediately
doubled; but the cost of handling it more than doubled. The increase
in the traffic necessitated the stringing of additional wires, and
the employment of more instruments, linemen, telegraphers and office
clerks. At the same time the Government was obliged to concede all
round increases of wages and salaries, in consequence of the general
increase in the cost of living which accompanied the world-wide
revival of trade ushered in by the discovery of gold in California and
Australia, the introduction of steamships upon the high seas, and the
building of railways in all parts of the world.

The inland messages increased by leaps and bounds from 397,289 in 1867
to 2,118,373 in 1876; and still the receipts from them did not cover
the operating expenses. In 1874 and 1875, for example, those expenses
averaged 14 cents per message. Accordingly, in 1877, the Government
adopted a new scale of charges on inland messages, to wit: an initial
charge of 6 cents per message, to which was added 0.5 cent for every
word transmitted. The Government assumed that the average length of the
inland messages would be 14 words; and that the average receipts per
message would be 13 cents. It hoped soon to reduce the average cost
per message below 13 cents, and hoped thus to make the inland traffic
remunerative. But those expectations never were realized; and to this
day the inland messages have been carried at a loss.[11]

[Sidenote: _French Experience_]

In 1861, the French State telegraphs reduced the rate for messages of
20 words, counting the address, to 20 cents for intradepartmental[12]
messages, and to 40 cents for interdepartmental messages. In 1866 the
average receipts per message were: 38 cents on the inland traffic;
$1.38 on the foreign traffic; and 55.8 cents on the traffic as a whole.
With these average receipts per message, the earnings were $1,541,519;
while the operating expenses were $1,796,692. In other words, the State
telegraphs lost $255,173 on the working, besides failing to earn any
interest on the capital invested in them, $4,760,000.

In making the foregoing statement, no allowance is made for the value
of the messages sent "on public service," messages for which the
State would have been obliged to pay, had the telegraphs been owned
or operated by companies. No such allowance can be made, because the
several official French statements submitted by Mr. Scudamore as to
the number of messages sent "on public service" applied to the years
1865 and 1867, years for which the operating expenses were not given.
Furthermore, the messages sent on public service in 1865 and 1867 were
so numerous as to indicate so loose a construction of the term "on
public service" as to make the returns worthless for the purpose of
determining the commercial value of the saving resulting to the State
from the public ownership of the telegraphs. For 1865, the number of
messages "on public service" was returned as 568,647, the equivalent of
23 per cent. of the number of messages sent by the public. For 1867,
the number was returned as 168,999, the equivalent of 5.94 per cent.
of the messages sent by the public. That those figures represented
an unreasonable resource to the telegraph for the transaction of the
State's business, is proved by the fact that in the United Kingdom,
in the period 1871 to 1890, the value of the messages sent "on public
service" was equivalent to less than 2 per cent. of the sums paid
by the public for the transmission of telegraphic messages. On the
basis of any reasonable use of the telegraphs "on public service,"
the financial results of the French State telegraphs would not have
been altered materially. The deficit, in 1866, on account of operating
expenses, $255,173, was sufficient to permit of the sending of 457,300
messages "on public service," the equivalent of 16 per cent. of the
messages sent by the public. It would be unreasonable to assume that
the State could have need of such recourse to the telegraphs.

[Sidenote: _Summary of Foreign Experience_]

To sum up the evidence from Belgium, Switzerland, and France,
submitted by Mr. Scudamore in 1866 to 1869: This evidence was that
rates of 20 cents and 10 cents for 20 words, applied to inland
messages, developed an enormous inland traffic, but that that traffic
was unremunerative. So long as the rates on foreign messages and
transit messages had remained very much higher than the rates on inland
messages, the Belgian and Swiss State telegraphs had paid handsomely.
But as soon as the latter rates had approached the level of the former
rates, the net revenue had tumbled headlong; and there was, in 1868 and
1869, no certainty that it would not disappear entirely, or be reduced
to such proportions as no longer to afford an adequate return upon the
capital invested in the telegraphs. In the case of France, no evidence
was presented that the State telegraphs ever had paid their way, though
the prices obtained for the transmission of foreign messages and
transit messages were between three and four times the returns obtained
from the transmission of inland messages.

[Sidenote: _English Companies' Experience_]

While the evidence from Belgium, Switzerland and France, presented by
Mr. Scudamore, did not support the proposition of a low uniform rate,
irrespective of distance, the evidence furnished by the experience of
the telegraph companies of the United Kingdom pointed strongly to the
conclusion that a uniform rate, irrespective of distance, of 24 cents
for 20 words, addresses not counted, was not remunerative in the then
state of efficiency of the telegraph. In this connection it must be
borne in mind that at this time messages had to be retransmitted at
intervals of 200 or 300 miles; and that, while the maximum distance a
message could travel was only 160 miles in Belgium, and 200 miles in
Switzerland, it was 600 miles in the United Kingdom.

In 1861 the telegraph business of the United Kingdom was in the
hands of two companies which had been organized in 1846 and 1852
respectively: the Electric and International Telegraph Company, and the
British and Irish Magnetic Telegraph Company. In that year, 1861, a new
company, the United Kingdom Electric Telegraph Company, invaded the
field with a uniform tariff, irrespective of distance, of 24 cents for
20 words, addresses free. The established companies had been charging
24 cents for distances up to 25 miles; 36 cents for distances up to 50
miles; 48 cents for distances up to 100 miles; 60 cents for distances
up to 200 miles; 96 cents for distances up to 300 miles; and $1.20 for
distances up to 400 miles.[13]

The United Kingdom Company began operations in 1861 with a trunk line
between London, Birmingham, Manchester, Liverpool and intermediate and
neighboring towns. Shortly afterward it opened a second trunk line from
London to Northampton, Leicester, Nottingham, Sheffield, Barnsley,
Wakefield, Leeds and Hull; and across through Bradford, Halifax,
Rochdale, and Huddersfield to Manchester and Liverpool. Subsequently
the company extended its line to Edinburgh and Glasgow, thus
lengthening to upward of 500 miles, the distance over which messages
were transmitted for 24 cents.[14]

In July 1865, the Board of Directors reported as follows to the
stockholders: "The Directors much regret to state that, notwithstanding
their earnest efforts to develop telegraphic communication so as to
render the shilling [24 cent] rate remunerative, the company has been
unable to earn a dividend. The system of the company consists of
trunk lines almost exclusively embracing nearly all the main centres
of business, telegraphically speaking, of the country. Seeing that
the company was working under the greatest possible advantages, and
that upward of four years had elapsed since the formation of the
company without the payment of any dividend to the proprietary, the
directors conceived that they would not be justified in continuing the
shilling [24 cent] system, and arrangements were therefore agreed to
for its alteration. The directors waited until the last moment before
reluctantly adopting this step, but having sought publicity in every
way, having persistently canvassed in every department of business, and
having endeavored by personal solicitations of numerous active agents
to attract trade, they at last saw themselves compelled to agree to a
measure that was greatly antagonistic to their personal wishes, but
absolutely essential for the well-being of the company, and requisite,
as they believe, for the permanent interests of the telegraphing
community."

In 1865, the United Kingdom Telegraph Company joined with its
competitors, the Electric and International Telegraph Company, and the
British and Irish Magnetic Telegraph Company, in the following rates
for 20 words, addresses free: 24 cents for distances up to 100 miles;
36 cents for distances between 100 and 200 miles; and 48 cents for
distances beyond 200 miles.

In July, 1866, the directors of the United Kingdom Telegraph Company
reported that in the last half-year "the company earned an amount
of profit equal to 6 per cent. dividend over the whole of its share
capital."

When the United Kingdom Company had entered the field, in 1861, with
the 24 cent rate, the old established companies, the Electric and
International and the British and Irish Magnetic, had been compelled
to adopt the 24 cent rate between all points reached by the United
Kingdom Company. In February, 1863, the directors of the Electric and
International Company reported that the 24 cent circuit between London,
Liverpool, Manchester and Birmingham still was unremunerative. The
company was losing money on every message transmitted, though the 24
cent rate had increased business to such an extent that the company
had been obliged to add two wires to the circuit in question. Since
the business done by means of the additional wires did not pay, the
directors had charged the cost of those wires to operating expenses,
not to capital account. The company did not care for the business, but
could not refuse to take it. In July, 1865, the directors reported:
"After a trial of four years, the experiment of a uniform shilling
rate [on certain circuits] irrespective of distance, has not justified
itself."

The half yearly reports of the British and Irish Magnetic Company from
1862 to 1865 reported that "for any but very short distances," the 24
cent tariff was "utterly unremunerative." The effect of the rate was to
absorb in unavoidable additional expenses a very large portion of the
increase in revenue coming from the increase in business.

In 1859 the London District Telegraph Company was organized for
the purpose of transmitting telegraph messages between points in
Metropolitan London. In 1860 the company had 52 stations and 73.5 miles
of line; and it carried 74,582 messages. In 1862 it had 84 offices and
103 miles of line, and it carried 243,849 messages. In 1865 the company
reached its highest point, carrying 316,272 messages. The company at
that time had 123 miles of line and 83 offices. The London District
Telegraph Company began with a tariff of 8 cents for 10 words, and 12
cents for a message of 10 words with a reply message of 10 words. It
soon changed its tariff to 12 cents for 15 words, experience having
shown that 10 words was an insufficient allowance.[15] Subsequently the
company added porterage charges for delivery beyond a certain distance.
In 1866, the company raised its tariff to 24 cents. The company never
earned operating expenses; and in November, 1867, its shares, upon
which $25 had been paid in, fluctuated between $3.75 and $6.25.[16]

Mr. Robert Grimston, Chairman of the Electric and International
Telegraph Company, in 1868 commented as follows upon the experience
of the London District Telegraph Company. "A very strong argument
against the popular fancy that the introduction of a low rate of charge
in towns and country districts would induce the shopkeepers and the
lower classes to use the telegraph is furnished by the example of the
London District Telegraph Company. A better or a wider field than
the metropolitan for an illustration of this theory could not surely
be furnished. The facts, however, being, that after several years of
struggling existence, the tariff being first fixed at 8 cents, and then
at 12 cents, the company has never paid its way."

FOOTNOTES:

[4] _A Report to the Postmaster General upon Certain Proposals which
have been made for transferring to the Post Office the Control and
Management of the Electric Telegraphs throughout the United Kingdom,
July, 1868_; _Supplementary Report to the Postmaster General upon the
Proposal for transferring to the Post Office the Control and Management
of the Electric Telegraphs, February, 1868_; _Special Report from the
Select Committee on the Electric Telegraphs Bill, 1868_; and _Report
from the Select Committee on the Telegraphic Bill, 1869_.

Unless otherwise stated, all the material statements made in this
chapter are taken from the foregoing official documents.

[5] _Hansard's Parliamentary Debates_, July 21, 1868, p. 1,603.

[6] _Special Report from the Select Committee on the Electric
Telegraphs Bill, 1868_; q. 2549 and 1581.

[7] _Special Report from the Select Committee on the Electric
Telegraphs Bill, 1868_; q. 2508; and _Report from the Select Committee
on the Telegraphic Bill, 1869_; q. 346.

[8] _Report from the Select Committee on the Telegraphic Bill, 1869_;
q. 327; and _Special Report from the Select Committee on the Electric
Telegraphs Bill, 1868_; q. 88.

[9] _Supplementary Report to the Postmaster General upon the Proposal
for transferring to the Post Office the Control and Management of the
Electric Telegraphs_, 1868; and Sir James Anderson, in _Journal of the
Statistical Society_, September, 1872.

BELGIAN STATE TELEGRAPHS
====+====================+====================+====================
| Inland messages | Foreign Messages |Messages in transit
----+-----+--------+-----+-----+--------+-----+-----+--------+-----
| Cost|Receipts| Loss| Cost|Receipts| Gain| Cost|Receipts| Gain
| per| per| per| per| per| per| per| per| per
| mes-| mes-| mes-| mes-| mes-| mes-| mes-| mes-| mes-
| sage| sage| sage| sage| sage| sage| sage| sage| sage
====+=====+========+=====+=====+========+=====+=====+========+=====
CENTS
====+=====+========+=====+=====+========+=====+=====+========+=====
1860| 42.0| 35.4| 6.8| 25.4| 49.0| 23.6| 16.8| 60.6| 43.8
1861| 38.4| 35.0| 3.4| 23.0| 44.8| 21.8| 15.4| 57.0| 41.6
1862| 39.4| 33.6| 5.8| 23.6| 43.2| 19.6| 15.8| 52.2| 36.4
1863| 30.0| 22.4| 7.6| 18.0| 34.0| 16.0| 12.0| 38.0| 26.0
1864| 27.0| 22.4| 4.6| 16.2| 31.2| 15.0| 10.8| 41.2| 30.4
1865| 25.4| 20.8| 4.6| 15.2| 27.0| 11.8| 10.2| 40.4| 30.2
1866| 18.0| 11.8| 6.2| 10.8| 23.4| 12.6| 7.2| 28.6| 21.4
1867| 18.2| 11.6| 6.6| 11.0| 24.0| 13.0| 7.2| 29.2| 22.0
1868| 18.4| 11.4| 7.0| 11.0| 22.4| 11.4| 7.4| 29.0| 21.6
1869| 17.2| 10.8| 6.4| 10.2| 21.2| 11.0| 6.8| 29.0| 22.2
====+=====+========+=====+=====+========+=====+=====+========+=====

[10] _Archiv für Post und Telegraphie_, 1903, p. 577.

[11] _Archiv für Post und Telegraphie_, 1903, p. 574.

[12] For administrative purposes France is divided into so-called
"Departments."

[13] _Journal of the Statistical Society_, March, 1881.

The Tariff of the Electric and International Co., for 20 words
(addresses not counted after 1854), was as follows:

In 1840, and for some years after, the charge was 2 cents a mile for
the first 50 miles; 1 cent a mile for the second 50 miles; and 5 cents
for each mile beyond 100 miles.

In 1850 the maximum charge for 20 words was reduced to $2.40; early in
1851 it was reduced to $2.04; and in November, 1851, it was reduced to
60 cents for 100 miles, and $1.20 for distances beyond 100 miles.

--------------+--------------+--------------+--------------+
1855 | 1862 | 1864 | 1865 |
-------+------+-------+------+-------+------+-------+------+
Miles | $ | Miles | $ | Miles | $ | Miles | $ |
-------+------+-------+------+-------+------+-------+------+
50 | 0.36 | 25 | 0.24 | 50 | 0.24 | | |
100 | 0.48 | 50 | 0.36 | | | | |
150 | 0.72 |100 | 0.48 |100 | 0.48 |100 | 0.24 |
151 and| 0.96 |200 | 0.60 |200 | 0.60 |100 to | |
beyond| |300 | 0.96 |300 and| |200 | 0.36 |
| |400 and| 1.20 | beyond| 0.72 |200 and| 0.48 |
| | beyond| | | | beyond| |
-------+------+-------+------+-------+------+-------+------+
-----------------------------------+--------+--------------+
| 1855 | 1865 |
-----------------------------------+--------+--------------+
| $ | $ |
To Ireland, by marine cable | 1.20 | 0.72 to 0.96 |
===================================+========+==============+

In February, 1872, two years after the uniform rate of 24 cents,
irrespective of distance, had been put in force by the Government, the
Telegraph Department made a careful examination of 7,000 messages sent
from the large cities to all parts of the United Kingdom. The average
charge per message was found to be 27 cents; under the rates enforced
by the telegraph companies in 1865, the average charge would have been
52 cents.--_Report of the Postmaster General_ for 1872.

[14] The United Kingdom Telegraph Co.

========+=============+=============+=========+===========+
| | |Number of| Number of |
|Miles of line|Miles of wire| offices | messages |
--------+-------------+-------------+---------+-----------+
1861 | 305 | 1968 | 16 | 11,549 |
1862 | 372 | 2741 | 22 | 133,514 |
1863 | 831 | 5099 | 48 | 226,729 |
1864 | 1343 | 8096 | 100 | 518,651 |
1865 | 1672 | 9506 | 125 | 743,870 |
========+=============+=============+=========+===========+

[15] _Journal of Statistical Society_, March, 1881.

[16] _Miscellaneous Statistics for the United Kingdom_, 1862, 1864,
1866 and 1868-9; _Parliamentary Paper_ No. 416, Session of 1867-68; and
_Journal of the Statistical Society_, March, 1881.

LONDON DISTRICT TELEGRAPH CO.

=======+========+========+=========+==========
|Miles of|Miles of|Number of|Number of
| line | wire | offices | messages
-------+--------+--------+---------+----------
1860 | 73 | 335 | 52 | 74,582
1861 | 92 | 378 | 78 | 114,022
1862 | 103 | 401 | 84 | 243,849
1863 | 107 | 430 | 81 | 247,606
1864 | 115 | 454 | 80 | 308,032
1865 | 123 | 470 | 83 | 316,272
1866 | 150 | 495 | 80 | 214,496
1867 | 150 | 495 | 81 | 239,583
1868 | 163 | | 82 |
=======+========+========+=========+==========

CHAPTER III

THE ALLEGED BREAK-DOWN OF _LAISSEZ-FAIRE_

Upon the foregoing evidence, taken from the experience of the State
telegraphs of Belgium, Switzerland, and France, and from the experience
of the telegraph companies of the United Kingdom, Mr. Scudamore reached
the conclusion that in telegraphy, in the United Kingdom, private
enterprise had broken down. He stated his conclusion in these words:
"It is clearly shown, I think, ... that the cardinal distinction
between the telegraph system of the United Kingdom and the systems
of Belgium and Switzerland is this: that the latter have been framed
and maintained solely with a view to the accommodation of the public,
whilst the former has been devised and maintained mainly with a view to
the interests of shareholders, and only indirectly for the benefit of
the public." These words were intended to convey, and they did convey,
the meaning that the policy of _laissez-faire_ had broken down. That
policy rests on the assumption that in the long run, and upon the
whole, the public interest is conserved and promoted by the activities
of the individual citizens who are seeking to promote their personal
fortunes--by the activities of "the mere speculator and dividend
seeker"--to employ the phrase that came into common use in 1866 to
1869, and ever since, has been made to do yeoman service.

Let us test by the evidence--of which a large part is to be found
tucked away in the appendices to Mr. Scudamore's reports--this
conclusion that in telegraphy, in the United Kingdom, private
enterprise had broken down, and the policy of _laissez-faire_ had been
discredited.

The first thing to note in this connection is, that in the case of
telegraphy, as in the case of so many other British industries, public
ownership has been a parasite. It has been unwilling to assume the risk
and burden of establishing the industry, and has contented itself with
purchasing "ready-made" the industry after it had been developed by
private enterprise. When Mr. Ronalds attempted to interest the British
Government in telegraphy, he was told "that the telegraph was of no use
in times of peace, and that the semaphore in time of war answered all
the required purposes."[17]

In 1837, British individuals and companies began to stake their money
upon the telegraph in Great Britain; and in 1854 they even carried the
telegraph industry to continental Europe, notably to Belgium. In 1850
and 1851, the Governments of France, Belgium and Switzerland, profiting
by the losses suffered, and the technical advances made, by British
individuals and companies, appropriated, so far as their countries were
concerned, the new industry.

[Sidenote: _History of British Telegraphy_]

The Electric and International Telegraph Company was formed in 1846,
out of the reorganization of properties, that in 1837 had embarked in
telegraphy in England, and in 1845 had carried the telegraph industry
to Belgium.[18] At this time the use of the telegraph was confined
almost exclusively to railway purposes, such as train signalling. The
possibility of use for commercial purposes was so little appreciated
by the public, that the Electric and International Company, after
purchasing, in 1846, Messrs. Cooke and Wheatstone's inventions, was
looked upon as a complete commercial failure. The shares of the
company for several years were almost valueless; the chief source of
revenue then being contracts obtained from railway companies for the
construction and maintenance of railway telegraphs.

Between 1846 and 1851 great improvements were made in telegraphy, and
the public gradually learned to use the telegraph. In 1849 the Electric
and International declared its first dividend, mainly the result of
the contracts with the railway companies. In November, 1851, a cable
was laid between Dover and Calais; for the first time the prices of
the stock exchange securities in Paris were known the same day within
business hours on the London stock exchange; and the financial and
trading interests became convinced of the value of the telegraph.[19]

The Electric and International Company began in 1846 with a capital,
paid in, of $700,000, which had been increased, by the close of 1868,
to $5,849,375. The company grew steadily, and in 1867 it had 10,000
miles of line, and 49,600 miles of wire. In March, 1856, when the
company had a record of five years for dividends ranging from 6 to
6.5 per cent. on the capital paid in, the stock of the company was
selling at 80, which showed that the investing public deemed the
returns inadequate, considering the risks attaching to the business. In
January, 1863, when the company had a record of three years as a 7 per
cent. company, the stock still stood under par--at 99.5. In 1864 the
company paid 8 per cent., in 1865 it paid 9 per cent., and in 1866 to
1868 it paid 10 per cent.[20]

The British and Irish Magnetic Telegraph Company was formed in 1857
by amalgamation of the Magnetic Telegraph Company, organized in 1851,
and the British Telegraph Company, organized in 1852. In March, 1856,
the Magnetic had a paid up capital of $1,500,000, which was worth 60
cents on the dollar; and the British Company had a paid up capital of
$1,170,000, which was worth 47.5 cents on the dollar. In January, 1864,
the amalgamated company was paying 4.5 per cent., and its shares were
worth 62.5. In 1865 the British and Irish raised the dividend to 5 per
cent.; in 1866 to 6 per cent., and in 1867 to 7.5 per cent. In 1866 the
stock sold at 78 to 90; and in 1867 at 90 to 97. In 1867 the company
had 4,696 miles of line, and 18,964 miles of wire.

The United Kingdom Telegraph Company was organized in 1860, and began
operations in 1861. In November, 1867, its shares were worth from 25
cents to 35 cents on the dollar. At that time the company had 1,692
miles of line, and about 9,827 miles of wire.

The London District Telegraph Company, which subsequently became the
London and Provincial, began business in 1860 with 52 offices in
Metropolitan London. In 1862 it increased the number of its offices to
84; and at the time of its sale to the State, it had 95 offices. The
company never earned operating expenses. It began by charging 8 cents
for 10 words; later on it charged 12 cents for 15 words; and in 1866 it
raised its charge to 24 cents.

Very little new capital was invested by the telegraph companies after
1865, because of "the very natural reluctance of the companies to
extend the systems under their control so long as the proposal of the
acquisition of those systems by the State was under consideration," to
use the words of Mr. Scudamore.

[Sidenote: _Adequate Results of Private Enterprise_]

The foregoing facts show that private enterprise was ready throughout
the period beginning with 1838 to incur considerable risks in
establishing the new industry of telegraphy, and in giving to the
public facilities for the use of that industry. Private enterprise
did not at any time adopt the policy of exploiting the public by
confining itself to operations involving little or no risk, while
paying well. It is true that once a company had reached the position
of paying 5, 6, 7, 8, or more, per cent., it tried to maintain that
position, and refrained from making extensions at such a rate as to
cause a decrease in the dividend. But that fact does not warrant the
charge that the companies neglected their duty to the public. Until the
threat of purchase by the State arrested extensions, and the dividends
rose unusually rapidly, the earnings of the companies were moderate;
and finally, though the companies tried to maintain whatever rate of
dividend had once been attained, the investing public never believed
that even the Electric and International would maintain indefinitely
the 10 per cent. rate. That is shown by the fact that until the public
began to speculate on the strength of the prospect of the State paying
a big price for the property of the Electric and International, the
stock of that company never sold for more than 14 years' purchase.[21]
Had the public believed that the 10 per cent. dividend would be
maintained indefinitely, the stock would have risen to 25 years'
purchase, the price of the best railway shares.

* * * * *

[Sidenote: _Mr. Scudamore's Statistics_]

In order to show that the people of the United Kingdom suffered from
a lack of telegraphic facilities, when compared with the people of
Belgium and Switzerland, Mr. Scudamore stated in his reports of 1865
and 1866, that there were: in Belgium, 17.75 miles of telegraph line
to every 100 square miles; in Switzerland, 13.7; and in the United
Kingdom, 11.3. He stated, also, that there were in Belgium 6.33
telegraph offices to every 100,000 people; in Switzerland, 9.9; and in
the United Kingdom, 5.6.

Mr. Scudamore obtained the figures with regard to the United Kingdom
from the Board of Trade returns.[22] For 1865 to 1867, those returns
were very incomplete; but in 1868 they became very full. Mr.
Scudamore's reports of 1865 and 1868 were not ordered, by the House of
Commons, to be printed, until April, 1868, when the completed Board of
Trade returns were available. But neither in the reports as laid before
Parliament, nor in the testimony given before the Select Committee of
Parliament in 1868, did Mr. Scudamore draw attention to the fact that
the statement that the United Kingdom had only 11.3 miles of telegraph
line to every 100 square miles of area, and 5.6 telegraph offices to
every 100,000 people, was based on incomplete returns.

The Board of Trade return for 1868 stated that the Lancashire and
Yorkshire Railway Company had 432 miles of telegraph lines and that
various other companies not enumerated in 1865, had, in 1868, 3,665
miles of line. If it be assumed that in the period from 1865 to 1868
the Lancashire and the other railway companies not enumerated in 1865,
increased their net at the same rate as did the three railway companies
that were enumerated in 1865, namely, 11 per cent., there must have
been, in 1865, not less than 3,825 miles of telegraph line of which Mr.
Scudamore took no account in fixing the total mileage at 16,066 miles.
If it be further assumed that one-third of the 3,825 miles in question
paralleled telegraph lines of the telegraph companies, there were
left out of account in 1865 by Mr. Scudamore 2,550 miles of telegraph
line, the equivalent of 2.1 miles per 100 square miles of area. On the
foregoing assumptions the mileage that should have been assigned to the
United Kingdom in 1865 was not 11.3, but 13.4.

Considerations similar to the foregoing ones, when applied to Mr.
Scudamore's statement that there were, in 1865, 2,040 telegraph
stations, show that there probably were 2,680 telegraph stations in
1865, a full allowance being made for duplication. The last named
figure would have been equivalent to 8.9 telegraph offices for every
100,000 people as against 5.6 reported by Mr. Scudamore.

The foregoing corrections probably err in the direction of understating
the telegraph facilities existent in the United Kingdom in 1865. These
corrected results show that in the matter of telegraph line per 100
square miles of area, the United Kingdom was abreast of Switzerland
in 1865, though considerably behind Belgium; and that, in the matter
of telegraph offices per 100,000 people, it was almost abreast of
Switzerland, and considerably in advance of Belgium.

In this connection it is helpful to note that in 1875, after the
British Government had spent about $12,500,000 in rearranging and
extending the telegraph lines, as against Mr. Scudamore's estimate
of 1868 that $1,500,000 would suffice for all rearrangements and
extensions, the number of miles of telegraph line per 100 square miles
of area was, 20 in the United Kingdom, and 27.4 in Belgium.[23]

[Sidenote: _Mr. Scudamore's Standards of Service_]

Mr. Scudamore submitted several other arguments in support of the
statement that private enterprise had failed to provide the public with
sufficient telegraphic facilities. He submitted a list of 486 English
and Welsh towns, ranging in population from 2,000 to 200,000, and
stated in each case whether or not the town was a telegraph station;
and if it was one, whether the telegraph office was, or was not, within
the town limits. Mr. Scudamore summarized the facts elucidated, with
the statement that 30 per cent. of the 486 towns were well served; that
40 per cent. were indifferently served; that 12 per cent. were badly
served; that 18 per cent. were not served at all; and that the towns
not served at all had an aggregate population of more than 500,000.[24]

Mr. Scudamore did not define his standards of good service,
indifferent service, bad service, and absence of service; but
examination of his data shows that his standards were so rigorous that
the state of affairs revealed in his summary was by no means so bad
as might appear at first sight. Mr. Scudamore took as the standard
of good service, the presence of a telegraph office within the town
limits. He characterized as indifferent the service of 98 towns in
which the telegraph office was within one-quarter of a mile of the
Post Office, though outside of the town limits; as well as the service
of 88 towns in which the telegraph office was within one-half a mile
of the Post Office, though outside of the town limits. He called the
service bad in the case of 38 towns in which the telegraph office was
within three-quarters of a mile of the Post Office; as well as in the
case of 22 towns in which the telegraph office was one mile from the
Post Office. He said there was no service whenever the distance of
the telegraph office from the Post Office exceeded one mile. In this
connection it should be added that the telegraph lines followed the
railway; and that in consequence of the prejudice against railway
companies in the early days, very many cities and towns refused to
allow the railway to enter the city or town limits.

Mr. Scudamore's data showed that there had been in 1865 not less than
96 towns in which the distance between the Post Office and the nearest
telegraph office exceeded one mile. In a foot-note, in the appendix,
Mr. Scudamore stated that in 1868, not less than 25 of the 96 towns
had been given a railway telegraph office; but no mention of that
fact did he make in the main body of the report, the only part of the
document likely to be read even by the comparatively small number of
the Members of Parliament who took the trouble to read the document
at all. As for the writers of the newspaper press, and the general
public, they accepted without exception the statement that in 1868 not
less than 18 per cent. of the towns in question, with an aggregate
population of over 500,000, had no telegraphic service. As a matter of
fact the statement applied only to 14.6 per cent. of the towns, with an
aggregate population of 388,000;[25] and many of the towns that still
were without service in 1868 would not have been in that condition, had
not the agitation for the nationalization of the telegraphs arrested
the investment of capital in telegraphs in the years 1865 to 1868.

Distance of the
Telegraph Station Number of Range of Aggregate
from the Post Towns Population Population
Office, miles

1.25 7 2,000 to 16,000 43,000
1.50 7 2,000 to 65,000 84,000
1.75 2 2,000 to 4,000 6,000
2.00 6 2,000 to 15,000 23,000
2.50 3 3,000 to 5,000 11,000
3.00 6 2,000 to 8,000 23,000
3.25 1 4,000 4,000
3.50 4 2,000 to 4,000 11,000
3.75 1 3,000 3,000
4.00 3 4,000 12,000
4.50 2 3,000 6,000
4.75 2 3,000 to 5,000 8,000
5.00 7 2,000 to 37,000 62,000
5.50 1 5,000 5,000
6.00 4 2,000 to 4,000 12,000
6.75 1 4,000 4,000
7.00 5 4,000 to 7,000 27,000
9.00 2 3,000 to 6,000 9,000
9.25 1 3,000 3,000
10.00 2 3,000 to 6,000 9,000
12.50 1 14,000 14,000
14.00 1 4,000 4,000
17.75 1 3,000 3,000
? 1 2,000 2,000
71 388,000

Mr. Scudamore also submitted a table giving the total number of places
with money order issuing Post Offices in England and Wales, Scotland
and Ireland; and stated what number of those places had respectively
perfect telegraph accommodation, imperfect telegraphic accommodation,
and no telegraphic accommodation.[26] Mr. Scudamore contended that the
public interest demanded that each one of those places should have
at least one telegraph office, that office to be located as near the
centre of population as was the Post Office. He submitted no argument
in support of that proposition. But Parliament and the public accepted
the proposition with avidity, since Mr. Scudamore promised that the
extension required to give such a service would not cost more than
$1,000,000, about 1/11 or 1/12 of the total sum invested by the several
telegraph companies. Mr. Scudamore also promised that, after the
service had been thus extended, the total operating expenses of the
State telegraphs would be less than 45 per cent. of the gross receipts;
that the State telegraphs would at least pay their way, and that
they probably would yield a handsome profit. But when Mr. Scudamore
came to extend the State telegraphs, he spent upon extensions, not
$1,000,000, but about $8,500,000, and when the State came to operate
the telegraphs, the operating expenses quickly ran up to 87 per cent.
of the gross receipts in three years, 1874 to 1876. These errors of
Mr. Scudamore justify the statement that he made no case whatever
against the system of _laissez-faire_, or private ownership, on the
ground of the extent of the facilities offered to the public, under the
system of private ownership. For obviously it was one thing to condemn
the telegraph companies for not building certain extensions, those
extensions being estimated to cost only $1,000,000, and a different
thing altogether to condemn the telegraph companies for refusing to
build out of hand extensions that would cost $8,500,000 and would be
relatively unremunerative, if not absolutely unprofitable.

[Sidenote: _Tariffs and Growth of Traffic_]

It remains to consider whether the facts as to the charges made by the
telegraph companies for the transmission of messages, and the facts
as to the rate of increase in the number of messages transmitted,
supported Mr. Scudamore's contention that the system of private
ownership of the telegraphs had failed to conserve and promote the
public interest.

In 1851, the Electric and International Telegraph Company carried
99,216 messages, receiving on an average $2.41 per message. In 1856,
the year in which the Scotch Chambers of Commerce began the agitation
for nationalization, the company carried 812,323 messages, receiving on
an average $0.99 per message. In 1865, the year in which the telegraph
companies abolished the rate of 24 cents, irrespective of distance,
that had been in force between the leading cities, and the Chambers
of Commerce increased the agitation for purchase by the State, the
Electric and International carried 2,971,084 messages, receiving on an
average $0.49 a message. In the period from 1851 to 1867, the messages
carried by the company increased on an average by 28.76 per cent. a
year; the average receipts per message decreased on an average by 7.58
per cent. a year; and the gross receipts of the company increased on an
average by 13.61 per cent. a year.

In the period 1855 to 1866, the messages carried annually by the
British and Irish Magnetic Company grew from 264,727 to 1,520,640, an
average annual growth of 17.58 per cent. At the same time the average
receipts per message fell from $0.96 in 1855, to $0.48 in 1866.

In the period from 1855 to 1866, the number of messages carried
annually by all of the telegraph companies of the United Kingdom
increased from 1,017,529, to 5,781,989, an average annual increase of
16.36 per cent.

In the same period, from 1855 to 1866, the telegrams sent in
Switzerland increased on an average by 13.14 per cent. each year; those
sent in Belgium increased on an average by 31.45 per cent.; and those
sent in France increased on an average by 25.40 per cent. When one
takes into consideration that in Belgium, in 1867, only 38 per cent.
of the messages transmitted related to stock exchange and commercial
business, and that in France in the same year only 48 per cent. of the
messages sent related to industrial, commercial, and stock exchange
transactions, there is nothing in the comparison between the rate of
growth in the United Kingdom on the one hand, and in the countries
of Continental Europe on the other hand, to indicate that the use of
the telegraphs for the purposes of trade and industry was held back
in the United Kingdom by excessive charges or by lack of telegraphic
facilities. So far as the United Kingdom lagged behind, it did so
because the public had not learned to use the telegraphs freely for
the transmission of personal and family news. And when, in 1875,
under State owned telegraphs, the public of the United Kingdom had
learned to use the telegraphs as freely as the public of Continental
Europe used them, Mr. W. Stanley Jevons, the eminent British political
economist, in the course of a review of the price paid for this free
use of the telegraphs, said: "A large part of the increased traffic
on the Government wires consists of complimentary messages, or other
trifling matters, which we can have no sufficient motive for promoting.
Men have been known to telegraph for a clean pocket handkerchief"--Mr.
Jevons, in 1866 to 1869, had been an ardent advocate of nationalizing
the telegraphs.[27]

* * * * *

Mr. Scudamore in 1866 to 1869 caused many people to believe that the
United Kingdom was woefully behind the continental countries in the
use of the telegraphs. He did so by publishing a table which showed
that in 1866 there had been sent: in Belgium, 1 telegram to every 37
letters carried by the Post Office; in Switzerland, 1 telegram to every
69 letters; and in the United Kingdom, 1 telegram to every 121 letters.
That table, however, really proved nothing; for in 1866, there were
carried: in Belgium, 5 letters for every inhabitant; in Switzerland,
10 letters; and in the United Kingdom, 25 letters. Had the people of
Belgium and Switzerland written as many letters proportionately as the
people of the United Kingdom, the table prepared by Mr. Scudamore would
have read: Belgium, 1 telegram for every 185 letters; Switzerland, 1
telegram for every 172 letters; and the United Kingdom, 1 telegram for
every 121 letters.

Mr. Scudamore could, however, have prepared a table showing that the
people of Switzerland and Belgium used the telegraph more freely
than did the people of the United Kingdom, but not so much more
freely as to call for so drastic a remedy in the United Kingdom as
the nationalization of the telegraphs. The table in question would
have shown that in 1866, there was transmitted: in Switzerland, 1
telegram to every 3.75 inhabitants; in Belgium, 1 telegram to every
4.25 inhabitants; and in the United Kingdom, 1 telegram to every 5.3
inhabitants. The table in question would also have indicated the
necessity of care in the use of the several kinds of statistics just
put before the reader. The table placed Switzerland in advance of
Belgium, while the other sets of statistics had placed Belgium in
advance of Switzerland.

* * * * *

[Sidenote: _Alleged Wastefulness of Competition_]

Mr. Scudamore's concluding argument was that little or no relief from
the evils from which the public was suffering could be expected "so
long as the working of the telegraphs was conducted by commercial
companies striving chiefly to earn a dividend, and engaged in wasteful
competition." In support of the charge of wasteful competition he
stated "that many large districts are provided with duplicate and
triplicate lines, worked by different companies, but taking much the
same course and serving precisely the same places; and that these
duplicate or triplicate lines and duplicate or triplicate offices only
divide the business without materially increasing the accommodation of
the districts or towns which they serve." But when Mr. Scudamore sought
to substantiate this charge of waste arising out of competition, he
could do no more than state that not less than 2,000 miles of line in
a total of 16,066 miles were redundant, and that perhaps 300 to 350
offices in a total of 2,040 offices were redundant.

* * * * *

The evidence presented by Mr. Scudamore failed to reveal a situation
that called for so drastic a remedy as the nationalization of
the telegraphs. It revealed no evils or shortcomings that it was
unreasonable to expect would be sufficiently mitigated, if not entirely
removed, by the measures proposed by the telegraph companies.

Mr. Robert Grimston, Chairman of the Electric and International
Telegraph Company, stated that the telegraph companies long since would
have asked Parliament to permit them to consolidate, had there been
the least likelihood of Parliament granting the request. Consolidation
would have made the resulting amalgamated company so strong that the
company would have been justified in adopting a bolder policy in the
matter of extending the telegraph lines to places remote from the
railways. No single company could afford to assume too large a burden
of lines that would begin as "suckers" rather than "feeders." A company
with a large burden of that kind would be in a precarious position,
because any of the other existing companies, or some new company, might
take advantage of the situation and cut heavily into that part of the
company's business that was carried on between the large cities and was
bearing the burden of the non-paying extensions. But if the existing
companies were to consolidate, the resulting company would become so
strong that it need not fear such competition from any company newly
to be organized. That there was much strength in that argument appears
from the fact that, in 1869, Mr. Scudamore as well as the Government
adopted it in support of the request that the State be given the
monopoly of the business of transmitting messages by electricity. Mr.
Scudamore argued that since the State was going to assume the burden of
building and operating a large number of unprofitable, or relatively
unprofitable, extensions, it should not be exposed to the possibility
of competition from companies organized for the purpose of tapping the
profitable traffic between the large cities, "the very cream of the
business." Mr. Scudamore added that he had been told that a company
was on the verge of being organized for the purpose of competing for
the business between the large towns as soon as the properties of the
existing companies should have been transferred to the State.[28]

[Sidenote: _The Companies' Proposal_]

The telegraph companies proposed to give the public substantial
safeguards against the possibility of being exploited by the proposed
amalgamated company. They proposed that Parliament should fix maximum
charges for the transmission of messages, in conjunction with a limit
on dividends that might be exceeded only on condition that the existing
charges on messages be reduced by a stated amount every time that
the dividend be raised a stated amount beyond the limit fixed. The
companies proposed also that shares to be issued in the future should
be sold at public auction, and that any premiums realized from such
sales should be invested in the plant with the condition that they
should not be entitled to any dividend. Provisions such as these,
at the time, were in force in the case of certain gas companies and
water companies. They have for years past been incorporated in all gas
company charters; and they have worked well. There was no reason, in
1866 to 1869, why the proposals of the telegraph companies should not
be accepted; that is, no reason from the view-point of the man who
hesitated to exchange the evils and shortcomings incident to private
ownership for the evils and shortcomings incident to public ownership.

FOOTNOTES:

[17] _The Edinburgh Review_, July, 1870.

[18] _Annales télégraphiques_, 1860, p. 547.

The company obtained a concession covering the whole of Belgium. In
September, 1846, it opened a line between Brussels and Antwerpen. The
tariff charged was low, but the line was so unprofitable that, in
1847, the company declined to build from Brussels to Quiévrain, where
connection was to be made with a proposed French telegraph line.

[19] _Journal of Statistical Society_, March, 1881.

[20] _Statistical Journal_, September, 1876, and current issues of _The
Economist_ (London).

[21] _Journal of the Statistical Society_, September, 1872.

[22] _Miscellaneous Statistics for the United Kingdom_, 1868-9, and
_Parliamentary Paper_, No. 416, Session 1867-68.

Length of electric telegraphs belonging to railway companies and
telegraph companies respectively.

In placing the total mileage of telegraph line at 16,066, in 1865,
Mr. Scudamore excluded the mileage of the London, Chatham, and Dover
Railway Company.

===============================+========+========+========+========+
Railway Companies: | 1865 | 1866 | 1867 | 1868 |
-------------------------------+--------+--------+--------+--------+
Lancashire & Yorkshire | Not | stated | 430 | 432 |
London, Brighton & South Coast | 241 | 266 | 284 | 284 |
London, Chatham & Dover | 134 | 134 | 134 | 140 |
South Eastern Railway | 324 | 333 | 351 | 351 |
Other Railway Companies | Not | stated | ... | 3,665 |
+--------+--------+--------+--------+
Total returned | 699 | 733 | 1,199 | 4,872 |
-------------------------------+ | | | |
Electric Telegraph Companies: | | | | |
| | | | |
Electric & International | 9,306 | 9,740 | 10,007 | 10,007 |
British & Irish Magnetic | 4,401 | 4,464 | 4,696 | 4,696 |
The United Kingdom | 1,672 | 1,676 | 1,692 | 1,692 |
The London District | 123 | 150 | 150 | 163 |
So. Western of Ireland | Not | stated | ... | 85 |
+--------+--------+--------+--------+
Total of Companies | 15,502 | 16,030 | 16,545 | 16,643 |
+--------+--------+--------+--------+
Grand Total returned | 16,201 | 16,763 | 17,744 | 21,515 |
===============================+========+========+========+========+

[23] In the _Fortnightly Review_, December, 1875, Mr. W. S. Jevons, the
eminent British statistician and economist, stated that the telegraph
mileage was 24,000 miles. This statement is accepted in the absence of
any official information. From 1870 to 1895 neither the _Reports of the
Postmaster General_, nor the _Statistical Abstracts_, nor the _Board of
Trade Returns_ stated the mileage of telegraph lines; only the total
mileage of telegraph wires was published.

[24] Mr. Scudamore's percentage figures, in some instances, were only
roughly correct.

[25] See table on page 47.

[26] England
and Wales Scotland Ireland

Number of places having Post
Offices that issued money
orders 2,056 385 509

Number of such places having:
Perfect telegraph accommodation 648 91 109

Imperfect accommodation 567 92 33

No accommodation 850 196 367

[27] _The Fortnightly Review_, December, 1875; and _Transactions of the
Manchester Statistical Society_, 1866-67.

[28] _Report from the Select Committee on the Telegraphic Bill_, 1869:
q. 321 to 329. In 1868, Mr. Scudamore and the Government had said that
the State ought not to be given the monopoly of the telegraph business.
_Special Report from the Select Committee on the Telegraphs Bill_,
1868; q. 124 and following, 319 and 320, and 2,464 and following.

CHAPTER IV

THE PURCHASE OF THE TELEGRAPHS

Upon inadequate consideration the Disraeli Ministry estimated
at $15,000,000 to $20,000,000 the cost of nationalization.
Political expediency responsible for Government's inadequate
investigation. The Government raises its estimate to
$30,000,000; adding that it could afford to pay $40,000,000
to $50,000,000. Mr. Goschen, M. P., and Mr. Leeman, M. P.,
warn the House of Commons against the Government's estimates,
which had been prepared by Mr. Scudamore. The Gladstone
Ministry, relying on Mr. Scudamore, estimates at $3,500,000
the "reversionary rights" of the railway companies, for which
rights the State ultimately paid $10,000,000 to $11,000,000.

On April 1, 1868, the Disraeli Government brought into Parliament a
"Bill to enable the Postmaster General to acquire, work, and maintain
Electric Telegraphs in the United Kingdom."[29] At this time the
Government still was ignorant of the precise relations existing between
the telegraph companies and the railways; and it did not foresee that
the purchase of the assets of the telegraph companies would lead to the
purchase of the reversionary rights of the railways in the telegraphs,
the telegraphs having been, for the most part, erected on the lands
of the railways, under leases of way-leaves that still had to run,
on an average, 23.7 years. At this time, therefore, the Government
contemplated only the purchase of the Electric and International
Company, the British and Irish Company, the United Kingdom Company,
and the London and Provincial, the successor of the London District
Telegraph Company.

[Sidenote: _Purchase Price estimated at $15,000,000 to $20,000,000_]

In the course of the debate upon the order for the Second Reading of
the Bill, the Chancellor of the Exchequer, Mr. G. W. Hunt, said that
"if the House would excuse him, he would rather not enter fully into
details with respect to the purchase at present. But he would say that,
speaking roughly, it would take something near $20,000,000, or, at
all events, between $15,000,000 and $20,000,000 for the purchase and
the necessary extensions of the lines." He added that if the purchase
should be made, the telegraphs would yield a net revenue of $1,050,000
a year; and that sum would suffice to pay the interest on the debt to
be contracted, and to clear off that debt in twenty-nine years.[30]

Parliament was to be prorogued in August; and a General Election was
to follow prorogation. The Government naturally was anxious to avoid
having to go into the General Election without having achieved the
nationalization of the telegraphs; particularly, since the opposition
party also had committed itself to State purchase. Then again, the
Government believed that the value of the telegraphs was increasing so
rapidly that the State would lose money by any postponement of the act
of purchase. For these reasons the Government entered into negotiations
with the various interests that evinced a disposition to oppose in
Parliament the Government's Bill, until finally all opposition was
removed.

[Sidenote: _Politics forces Government's Hand_]

The Bill, as introduced, proposed that the State pay the four telegraph
companies enumerated, the money actually invested by them--about
$11,500,000--together with an allowance for the prospective increase
of the earnings of the companies, and an additional allowance for
compulsory sale. The last two items were to be fixed by an arbitrator
who was to be appointed by the Board of Trade. The companies flatly
rejected this offer, pointing, by way of precedent, to the Act of 1844,
which fixed the terms to be given to the railways, should the State at
any time resolve upon the compulsory purchase of the railways. The Act
in question prescribed: "twenty-five years' purchase of the average
annual divisible profits for three years before such purchase, provided
these profits shall equal or exceed 10 per cent. on the capital; and,
if not, the railway company shall be at liberty to claim any further
sum for anticipated profits, to be fixed by arbitration."

The Government next offered the companies the highest market price
reached by the stock of the companies on the London Stock Exchange
up to May 28, 1868, plus an allowance for prospective profits, to be
fixed by arbitration. The companies rejected that offer, but accepted
the next one, namely, twenty years' purchase of the profits of the year
that was to end with June 30, 1868.[31] Mr. W. H. Smith, one of the
most highly esteemed Members of the House of Commons, who was himself
a director in the Electric and International, subsequently spoke as
follows of these negotiations: "In 1868 the telegraph companies were
by no means desirous to part with their property, but the question
whether the Government should be in possession of the telegraphs having
been forced on their consideration, the three principal companies
very reluctantly came to an arrangement with the Government of the
day. He did not wish to express any opinion on the bargain which had
been made, and would only say for himself and those with whom he was
associated, that they very deeply regretted to be obliged to part with
property which had been profitable, and which they had great pleasure
in managing."[32] Mr. Smith added that the net earnings of the Electric
and International had increased from $336,815 in 1862, to $859,215 in
1868; and that the average annual increase per cent. had been 17.2 per
cent.

The state of the public mind at the time when the

Government introduced its Bill, was indicated in the issue of April
11, 1868, of _The Economist_, the leading financial newspaper of Great
Britain. Said the journal in question: "Even if the companies resist,
they will not be very powerful opponents--firstly, because the leaders
of both parties have already sanctioned the scheme; and, secondly,
because the companies are exceptionally unpopular. There is, probably,
no interest in the Kingdom which is so cordially disliked by the press,
which, when united, is stronger than any interest, and which has
suffered for years under the shortcomings of the private companies.
The real discussion in Parliament, should there be any, will turn
upon a very different point, and it will be not a little interesting
to observe how far the current of opinion on the subject of State
interference with private enterprise, has really ebbed within the last
few years. Twelve or fourteen years ago it would have been useless for
any Chancellor of the Exchequer to propose such an operation.... It was
[at that time] believed on all sides that State interference was wrong,
because it shut out the private speculators from the natural reward of
their energy and labor."

Before the Select Committee of the House of Commons to which was
referred the Government's Bill, Mr. Scudamore argued that if Parliament
could not make a reasonable bargain with the telegraph companies, it
could authorize the Post Office to build a system of telegraphs. But
that measure ought to be adopted only as a last resource. It was of
paramount importance to avoid shaking the confidence of the investors
that private enterprise would be allowed to reap the full benefits of
its enterprise, and that it would be exposed to nothing more than the
ordinary vicissitudes of trade. That the possibility of competition by
the State, by means of money taken from the people by taxation, never
had been included within the ordinary vicissitudes of trade. Coming to
the question of paying twenty years' purchase of the profits of the
year 1867-1868, Mr. Scudamore said: "The telegraphs are so much more
valuable a property than we originally believed, that if you do not buy
them this year, you unquestionably will have to pay $2,500,000 more for
them next year.... Their [average] annual growth of profit is certainly
not less than ten per cent. at present. If you wait till next year
and only give them nineteen years' purchase, you will give them more
than you will now give. If you wait two years, and give them eighteen
years' purchase, you will still give them more than you will now give,
assuming the annual growth of profit to be the same. If you wait four
years, and give them sixteen years' purchase, you will again give them
more, and in addition you will have lost the benefit accruing in the
four years, which would have gone into their pockets instead of coming
into the pockets of the nation."[33]

[Sidenote: _Purchase price estimated at $30,000,000_]

In the House of Commons, the Chancellor of the Exchequer, Mr. G. W.
Hunt, said: "The terms agreed upon, although very liberal, were not
more liberal than they should be under the circumstances, and did
not offer more than an arbitrator would have given. The companies
had agreed to sell at twenty years' purchase of present net profits,
although those profits were increasing at the rate of 10 per cent. a
year. He was satisfied the more the House looked into the matter, the
more they would be satisfied with the bargain made."[34] The Chancellor
of the Exchequer continued with the statement that Mr. Scudamore
estimated that the Postmaster General would obtain from the telegraphs
a net revenue of $1,015,000 at the minimum, and $1,790,000 at the
maximum. The mean of those estimates was $1,402,500, which sum would
pay the interest and sinking fund payments--3.5 per cent. in all--on
$40,000,000. The Government, therefore, could afford to pay $40,000,000
for the telegraphs. Indeed, on the basis of the maximum estimate of net
revenue, it could pay $50,000,000. But Mr. Scudamore confidently fixed
at $30,000,000 at the maximum, the price that the Government would
have to pay. Mr. Scudamore's estimates of net revenue "would stand any
amount of examination by the House, as they had stood very careful
scrutiny by the Select Committee, and for the Government to carry out
the scheme would not only prove safe but profitable."

By this time the Government had learned that it would be necessary
to purchase the reversionary rights of the railway companies in the
business of the telegraph companies. The Government had agreed with
the railway companies upon the terms under which it was to be left to
arbitration how much should be paid for those reversionary rights. The
Chancellor of the Exchequer stated that he was unwilling to divulge
the Government's estimates of what sums would be awarded under the
arbitration; for, if he did divulge them, they might be used against
the Government before the arbitrators. "But Mr. Scudamore, whose
ability with regard not only to this matter, but also to other matters,
had been of great service to the Government, had given considerable
attention to the matter, and Mr. Scudamore believed that $30,000,000
would be the outside figure" to be paid to the telegraph companies and
the railway companies. The Chancellor of the Exchequer added that Mr.
Scudamore's "calculations had been submitted to and approved by Mr.
Foster, the principal finance officer of the Treasury."

In passing, it may be stated that Mr. Foster had stated before the
Select Committee of the House of Commons that he had given only "two or
three days" to the consideration of the extremely difficult question of
the value that the arbitrators would be likely to put upon the railway
companies' reversionary rights.[35]

[Sidenote: _Parliament warned against Government's Estimates_]

Mr. Goschen, of the banking firm of Frühling and Goschen, who had
been a member of the Select Committee, and had taken an active part
in its proceedings, replied that "the inquiry [by the committee] had
been carried on under great disadvantages. An opposition, organized by
private interests [the telegraph companies and the railway companies],
had been changed into an organization of warm supporters of the Bill
pending the inquiry. Before the Committee there appeared Counsel
representing the promoters [_i. e._, the Government], and, at first,
counsel representing the original opposition to the Bill [_i. e._ the
telegraph and railway companies]; but in consequence of the change
in the views of the opposition, who during the proceedings became
friendly to the Bill, there was no counsel present to cross-examine the
witnesses. Consequently, in the interests of the public, and in order
that all the facts might be brought to light, members of the committee
[chiefly Mr. Goschen and Mr. Leeman] had to discharge the duty of
cross-examining the witnesses. The same causes led to the result that
the witnesses produced were all on one side." ...[36]

Mr. Goschen emphasized the fact that upon the expiring of the telegraph
companies' leases of rights of way over the railways, the reversionary
rights of the railways would come into play, and that the Government,
after having paid twenty years' purchase to the telegraph companies,
"would probably have to pay half as much again to the railways." "The
railways had felt the strength of their position so much, that they
had pointed out to the committee that they would not only be entitled
to an increase in the rate which they now received [as rent from the
telegraph companies] as soon as the leases expired, but they would
also be entitled to an indemnification [from the State] for the
loss they would sustain in not being allowed [in consequence of the
nationalization of the telegraphs] to put the screw on the telegraph
companies." Mr. Goschen said "he felt very strongly on this point
because he was convinced that it was impossible to find an instance
of any private enterprise which, while it returned a profit of 15 per
cent. to its shareholders, enjoyed a monopoly for any great length
of time." If the Government purchased the assets of the telegraph
companies, the railway companies would succeed in compelling the State
to share with them the great profits to be obtained from the business
of telegraphy. They would do so by compelling the Government to pay a
big sum for their reversionary rights in the telegraph companies, as
the price for abstaining from building up a telegraph business of their
own, upon the expiry of the telegraph companies' leases. No business
that yielded a return of 15 per cent. could be worth twenty years'
purchase, for such returns were very insecure, because of the certainty
that competition would arise from persons who would be content with ten
per cent., or less.[37]

Mr. Leeman, who had sat on the Select Committee, and had, with Mr.
Goschen, done all of the cross-examining directed to bring out the
points that told against the Government's proposal, followed Mr.
Goschen in the debate. He began by stating that he spoke with "twenty
years' experience as a railway man;" and he directed his argument
especially against the terms of the agreements made by the Government
to purchase the reversionary rights of the railways in the telegraph
companies' businesses. "Mr. Scudamore, who was what he had already been
described to be--a most able man--had not known, up to the time of
the second reading of the Bill [June 8, 1868], what were the existing
arrangements between the telegraph companies and the railway companies;
and, subsequently, while still without the requisite knowledge on
that point,[38] he went and agreed on the part of the Government to
buy the interest of the telegraph companies at 20 years' purchase of
their profits. In addition it was to be remembered that the railway
companies had reversionary interests which would come into operation
after comparatively short time for which their arrangements with the
telegraph companies were to continue. In July, 1866, Mr. Scudamore
estimated the necessary outlay on the part of the Government at
$12,000,000. In February, 1868, another officer of the Government
raised the estimate to $15,000,000; but it was not until the Bill
came before the committee [July, 1868], that Mr. Scudamore said that
$30,000,000 would be required.... He [Mr. Leeman] undertook to say that
Mr. Scudamore was as wide of the mark in his estimate of $30,000,000,
as he had been in his estimate of $12,000,000. At the expiration of
their agreements with the telegraph companies, several [all] of the
railway companies would have it in their power to compete with the
Post Office in the transmission of telegraphic messages. No doubt
this fact would be brought under the notice of the arbitrators when
the value of their reversion was being considered, and at what price
would the arbitrators value this reversionary power of competition?
Had Mr. Scudamore made any estimate on the subject? Owing to the
position in which Mr. Scudamore had placed the Government, the railway
companies had demanded and had been promised terms in respect of their
reversions, which he, as a railway man, now said it was the duty of any
Government to have resisted." ...[39]

[Sidenote: _Railway Companies' Reversionary Rights_]

For the better understanding of this question of reversions, it must
be stated that the telegraph companies, for the most part, had erected
their poles and wires on the permanent way of the railway companies,
under leases of way-leaves, which, in 1868, still had 23.7 years to
run, on the average.[40] As the leases should expire, the railway
companies would have an opportunity to try to obtain better terms,
or to order the companies to remove their plant, and then to erect
their own plant, and themselves engage in the telegraph business. But
the railway companies were handicapped by the fact that the leases
did not expire together, and that it would be difficult to build up
a new telegraph system piecemeal out of the parts of line that would
become free in the next three years to twenty-nine years. There was,
therefore, much room for difference of opinion on the question how far
the railway companies would be able "to put the screw" on the telegraph
companies upon the successive expirations of leases. The Stock Exchange
doubtless took the contingency into consideration, that being one
reason why the Electric and International shares did not rise above
fourteen years' purchase of the annual dividends. Mr. Scudamore, before
the Select Committee, expressed the opinion that the railway companies
could force the telegraph companies "to give them somewhat better
terms; that would be the extreme result of any negotiations between
the telegraph companies and the railway companies." To Mr. Foster,
principal officer of the Finance Division of the Treasury, whom the
Government called to support Mr. Scudamore's evidence, Mr. Leeman put
the question: "Looking at it as a financial question, do you suppose
all the railways in the country, having power to work their telegraphs
at the end of ten years, but for this Bill, will not put in a claim for
a very large sum in respect of that reversion?" The witness replied: "I
do not think it would be of very great value in the first place, and in
the next place it would be a value deferred for ten years, which would
very much diminish it." To the further query: "You do not take the view
that we shall have to pay the railway companies and also the telegraph
companies for the same thing," he replied in the negative.[41]

Shortly after the Government's Bill had been referred to the Select
Committee, the Government made the railway companies this proposition,
which was accepted. The Government was to acquire perpetual and
exclusive way-leaves for telegraph lines over the railways, and the
price to be paid therefor was to be left to arbitration. The railway
companies were to have the choice of presenting their claims either
under the head of payment for the cession of perpetual and exclusive
way-leaves to the Government; or, under the head of compensation
for the loss of right to grant way-leaves to any one other than the
Government, as well as for the loss of right themselves to transmit
messages, except on their own railway business. The Government was
of the opinion that the sums to be paid to the railways under this
agreement would not be large enough to raise above $30,000,000, the
total sum to be paid to the telegraph companies and the railways.

Parliament enacted the Bill of 1868 authorizing the Government to
purchase the property of the telegraph companies and the rights of the
railways; but it provided that the resulting Act of 1868 should not
take effect, unless, in the Session of 1869, Parliament should put at
the disposal of the Postmaster General such monies as were required to
carry out the provisions of the Act of 1868.

The Government immediately appointed a committee to ascertain the
profits earned by the telegraph companies in the year that had ended
with June, 1868. The committee, which consisted of the Receiver and
Accountant General of the Post Office, and other gentlemen selected
from the Post Office for their general ability, but especially for
their knowledge of accounts, in June and July, 1869, reported that
the aggregate of the sums to be paid to the six telegraph companies
was $28,575,235,[42] the companies having put in claims aggregating
$35,180,185.

While the Bill had been before the Select Committee, the Government
had agreed to purchase the properties of Reuters Telegram Company
(Norderney Cable), as well as of the Universal Private Company. The
price paid for those properties absorbed the margin on which Mr.
Scudamore and the Government had counted for the purchase of the
reversionary rights of the railways.

In the meantime, the Disraeli Ministry, which had carried the measure
of 1868, had been replaced, on December 9, 1868, by the Gladstone
Ministry. On July 5, 1869, the Marquis of Hartington, Postmaster
General, laid before Parliament a Bill authorizing the Post Office
Department to spend $35,000,000 for the purpose of carrying out the
act of 1868. The Marquis of Hartington said that $28,575,000 would be
required for the purchase of the assets of the telegraph companies;
that $3,500,000 would cover the claims of the railways, which had not
yet been adjusted; and that $1,500,000 would suffice to rearrange the
telegraph lines and to make such extensions as would be required to
give Government telegraph offices to 3,776 places, towns, and cities,
the present number of places having telegraph offices being 1,882.

The Marquis of Hartington stated that Parliament "was quite competent
to repudiate the bargain of 1868, if they thought it a bad one....
Having given the subject his best consideration, he must say, without
expressing any opinion as to the terms of the bargain, that if they
were to begin afresh, he did not think they could get the property
on better terms." He added that the "Government would take over the
telegraphs of the companies on January 1, 1870, on the basis of paying
twenty times the profits of the year 1867-68. But that in consequence
of the increase of the business since 1867-68, the $28,575,000 which
the State would pay the telegraph companies, would represent, not
twenty years' purchase of the profits in 1870, but considerably under
seventeen years' purchase of those profits. The trade of the Electric
and International had been found to be growing at the rate of 18 per
cent. a year; that of the British and Irish at the rate of 32 per
cent."[43]

The Chancellor of the Exchequer, Mr. Robert Lowe, was by no means
so sanguine. He spoke of the "immense price" which the Government
was asked to pay, "a price of which he, at all events, washed his
hands altogether. The Right Honorable Gentlemen opposite [Mr. Hunt,
Chancellor of the Exchequer in 1868], had accused them of appropriating
the honor of this measure. He had not the slightest desire to contest
the point with the Right Honorable Gentleman, who was welcome to it
all. The matter was found by the present Government in so complicated a
state that it was impossible for them to recede; but unless the House
was prepared to grant that [_i. e._ a government monopoly] without
which they believed it would be impossible to carry on the business
effectively, it would be better that they should reject the Bill
altogether."[44]

Mr. Torrens moved an amendment adverse to the Bill, but his motion was
defeated by a vote of 148 to 23. Before the vote was taken, Mr. W.
Fowler, of the firm of Alexander & Company, Lombard Street, speaking of
the reversionary rights of the railway companies, had said: "Therefore,
for what the House knew, there might be contingent liabilities for
hundreds of thousands or millions of pounds sterling more."[45]

The measure became a law in August, 1869; and on February 5, 1870, the
telegraphs of the United Kingdom were transferred to the Post Office
Department. In the course of the year 1870, the Government bought
the properties of the Jersey and Guernsey Company and of the Isle of
Man Company. Those purchases, together with a large number of minor
purchases made in 1869, but not previously mentioned, raised the total
sum paid to the telegraph companies to $29,236,735.

[Sidenote: _Reversionary Rights estimated at $3,500,000 cost
$10,000,000_]

Not until 1879 were the last of the claims of the railway companies
adjusted. The writer has not succeeded in finding a specific official
statement of the aggregate sum paid to the railway companies for their
reversionary rights and for the grant to the Post Office of perpetual
and exclusive way-leaves over their properties, but he infers that
that sum was $10,000,000 or $11,000,000. That inference is based on
testimony given in 1888 by Mr. C. H. B. Patey,[46] Third Secretary to
the Post Office, and on information given by the Postmaster General in
1895.[47] It will be recalled, that in 1869, the Marquis of Hartington,
Postmaster General, had told the House of Commons that the payments
for the rights in question would not exceed $3,500,000. The Postmaster
General doubtless spoke on the strength of assurances given by Mr.
Scudamore. It will be remembered also that Mr. Leeman, in 1868, had
warned the House in strong terms that Mr. Scudamore's estimates were
not to be trusted. Finally, it will be remembered that in 1869, Mr. W.
Fowler, a financier of high standing, had warned the House of Commons
that "there might be contingent liabilities of thousands or millions of
pounds sterling more."

FOOTNOTES:

[29] _Hansard's Parliamentary Debates_, April 1, 1868, p. 678, the
Chancellor of the Exchequer.

[30] _Hansard's Parliamentary Debates_, June 9, 1868, p. 1,305.

[31] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868. Mr. Scudamore: q. 3,477 and following, 3,352 to
3,364, 172, and 3,379 to 3,386.

[32] _Hansard's Parliamentary Debates_, July 26, 1869, p. 755.

[33] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; q. 3,366 and following, 3,484 and following,
and 2,204 to 2,226.

[34] _Hansard's Parliamentary Debates_, July 21, 1868, p. 1,557 and
following.

[35] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; Mr. Foster, q. 2,857, _et passim_.

[36] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868.

Mr. Leeman cross-questions Mr. Scudamore.

2,331. "Did you agree with the Telegraph Companies till after this Bill
was sent to the Select Committee?"--"No."

2,332. "At the time this Bill was sent to this Committee you
had petitions against you, had you not, from 25 or 30 different
interests?"--"Yes; quite that."

2,333. "Since that time, have you, with the exception of the interest
which Mr. Merewether now represents [Universal Private Telegraph Co.],
bought up every interest, or contracted to buy up every interest, which
was represented by those petitioners?"--"Yes, subject to arbitration
and the approval of the committee."

2,334. "They had largely, upon the face of their petitions,
controverted the views you have been expressing to this
Committee?"--"They had endeavored to do so."

2,335. "They had in fact?"--"They had endeavored to put forward a case
against me. I do not say it was a good case."

2,336. "In direct opposition to the information you have been supplying
to the Committee?"--"Undoubtedly."

2,337. "The Electric and International Telegraph Company was the
company most largely interested, was it not?"--"Yes."

2,338. "That company had put forth its views controverting in detail
what you have been stating to the Committee in the course of your
examination?"--"Attempting to controvert it."

2,339. "By your arrangements, since the time at which this Bill was
submitted to this Select Committee to inquire into, you have in truth
shut the mouths of all these parties?"--"They are perfectly welcome to
speak; I am not shutting their mouths."

2,340. "Do you propose to call them?"--"No, but they are here to be
called."

2,341. "You do not propose to call them. This is the fact, is it
not, that this Bill was sent to the Select Committee, with special
instructions to make inquiries into various matters raised by petitions
from 25 to 30 different interests, and you have, since that time,
subsidized every interest that could give any information to this
Committee; is not that the fact?"--"Not quite."

[37] _Hansard's Parliamentary Debates_, July 21, 1868, p. 1,568 and
following.

[38] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868.

Mr. Leeman examines Mr. Scudamore.

Question 2,330. "When the Bill was read a second time in the House
of Commons, had you knowledge of the contents of the terms of the
agreement between the Telegraph Companies and the Railway Companies,
which enabled you to form any judgment financially as to what you might
ultimately have to pay in respect of the Railway Companies?"--"No, I
had not."

[39] _Hansard's Parliamentary Debates_, July 21, 1868, p. 1,578 and
following.

[40] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; Appendix, No. 7.

Leases to expire in: Number of miles of telegraph line
3 to 6 years 1,280
7 " 10 " 4,046
11 " 20 " 3,211
20 " 99 " 4,927
Average unexpired length of all leases: 23.67 years.

[41] Special _Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; q. 2,980, 3,023, and 1,132.

[42] _Parliamentary Paper_, No. 316, Session 1873.

=======================================+===============+==============
|Sums to be Paid|Capitalization
---------------------------------------+---------------+--------------
Electric and International Co | 14,694,130 | 6,200,000
British and Irish Magnetic Co | 6,217,680 | 2,670,000
United Kingdom Co | 2,811,320 | 1,750,000
[A]London and Provincial Co | 300,000 | 325,000
Reuter's Telegram Co. (Norderney Cable)| 3,630,000 | 1,330,000
Universal Private Co | 922,105 | ?
=======================================+===============+==============
[A] This Company was paid the highest market value of its
shares on the Stock Exchange in the first week of June, 1868,
plus an allowance for prospective profits.

[43] _Hansard's Parliamentary Debates_, July 5, 1869, p. 1,216 and
following, and July 26, p. 759 and following.

[44] _Hansard's Parliamentary Debates_, July 26, 1869, p. 767.

[45] _Hansard's Parliamentary Debates_, July 26, 1869, p. 747.

[46] _Report from the Select Committee on Revenue Department
Estimates_, 1888; q. 1,984.

[47] _Report of the Postmaster General_, 1895, p. 37.

CHAPTER V

NONE OF MR. SCUDAMORE'S FINANCIAL FORECASTS WERE REALIZED

The completion of the telegraph system cost $8,500,000;
Mr. Scudamore's successive estimates had been respectively
$1,000,000 and $1,500,000. Mr. Scudamore's brilliant forecast
of the increase of traffic under public ownership. Mr.
Scudamore's appalling blunder in predicting that the State
telegraphs would be self-supporting. Operating expenses on the
average exceed 92.5% of the gross earnings, in contrast to
Mr. Scudamore's estimate of 51% to 56%. The annual telegraph
deficits aggregate 26.5% of the capital invested in the plant.
The financial failure of the State telegraphs is not due to
the large price paid to the telegraph companies and railway
companies. The disillusionment of an eminent advocate of
nationalization, Mr. W. Stanley Jevons.

[Sidenote: _Estimated Expenditure_ versus _Actual Expenditure_]

As soon as the telegraphs had been transferred to the Government, the
Post Office Department set to work to rearrange the wires wherever
competition had caused duplication or triplication; to extend the
wires into the centre of each town or place "imperfectly" served;
to build lines to all places with money order issuing Post Offices
that had no telegraphic service; to enlarge the local telegraph
system of Metropolitan London from 95 telegraph offices in 1869, to
334 offices at the close of 1870; to give cities like Birmingham,
Leeds, Edinburgh, Glasgow and Manchester, from 14 to 32 telegraph
offices each;[48] to provide additional wires to meet the anticipated
growth of traffic; and to release some 5,000 or 6,000 miles of wire
for the exclusive use of the railway companies in the conduct of
transportation. For these several purposes the Post Office Department,
in the course of the three years ending with September, 1873, erected
8,000 miles of posts, and 46,000 miles of wire; strengthened 8,500
miles of line; laid 192 miles of underground pipes and 23 miles of
pneumatic pipes; and laid 248 miles of submarine cable. By September,
1873, the Post Office Department had spent upon the rearrangement and
extension of the telegraphs, the sum of $11,041,000.[49]

Something over $2,500,000[50] of that sum represented the cost of
repairing the depreciation suffered by the plant in the years 1868 and
1869, a depreciation for which full allowance had been made in fixing
the purchase price. The balance, $8,500,000, represented new capital
outlay.

In 1868 Mr. Scudamore had stated before the Select Committee of the
House of Commons that it would cost $1,000,000 to rearrange the
telegraphs and give perfect telegraphic service to 2,950 places.[51] In
1869, the Postmaster General, the Marquis of Hartington, had told the
House of Commons that $1,500,000 would cover the cost of rearranging
the telegraphs and giving perfect accommodation to 3,776 places.[52]
In April, 1867, on the other hand, Mr. W. Stanley Jevons, an eminent
economist, had estimated at $12,500,000 the cost of "the improvement of
the present telegraphs, and their extension to many villages which do
not at present possess a telegraph station."[53]

Mr. Scudamore's estimate of the cost of extending the telegraphs to
841 places that had no telegraphic accommodation, was based on the
assumption that each such extension would require, on the average,
the erection of three-quarters of a mile of telegraph line. But when
the Post Office Department came to build to "new" places, it found
that "the opening of upward of 1,000 additional telegraph offices
necessitated the erection of not less than 3,000 miles of telegraph
line."[54]

The results have shown that Mr. Scudamore's other estimates of the
cost of rearranging and extending the telegraphs, presented by himself
in 1868, and by the Postmaster General, the Marquis of Hartington,
in 1869, were equally wide of the mark. Numerous _Committees on the
Public Accounts_ sitting in the years 1871 to 1876, together with
the _Committee on Post Office Telegraph Department_, 1876, attempted
to inquire into the enormous discrepancy between the estimated cost
and the actual cost of rearranging and extending the telegraphs. But
none of those attempts were rewarded with any success whatever.[55]
The representatives of the Post Office and of the Treasury always
attributed the discrepancy "to the purchase of undertakings which were
not contemplated at the time when the original measures were submitted
to the House, and to unforeseen expenses for extensions." But the
State, as a matter of fact, made no purchases beyond those contemplated
in 1869--excepting the purchase of the Jersey and Guernsey cable for
$286,750, and the purchase of the Isle of Man cable for $80,680. As for
unforeseen extensions, in 1869, the Marquis of Hartington had counted
on carrying the telegraphs to 3,776 places, and in 1878 there were but
3,761 postal telegraph offices, counting the 300 offices in London, and
the numerous offices in the several large principal cities.[56]

* * * * *

Mr. Scudamore, aided by the state of public opinion created by the
agitation of the British Chambers of Commerce under the leadership
of the Chamber of Commerce of Edinburgh, carried away the Disraeli
Ministry and the Gladstone Ministry. Even more powerful than Mr.
Scudamore's argument from the extensive use made of the telegraphs on
the Continent of Europe, was Mr. Scudamore's promise that the State
telegraphs should begin by paying a profit sufficient to cover the
interest on $30,000,000 at the lowest estimate, and $50,000,000 at
the highest estimate; and that the profit should increase with the
advancing years.

[Sidenote: _Penny Postage Precedent_]

Before examining the evidence upon which Mr. Scudamore predicted such
large profits, it will be well to consider briefly the nature of the
evidence afforded to Mr. Scudamore by Sir Rowland Hill's epoch-making
"invention of penny postage." This is the more necessary, since Mr.
Scudamore himself cited the success of penny postage in support of
his proposal for a uniform rate of 24 cents for telegraph messages.
Upon the introduction of the penny postage, the letters carried by the
Post Office of the United Kingdom jumped from 76,000,000 in 1839 to
169,000,000 in 1840, and to 271,000,000 in 1845. But the net revenue
obtained by the Post Office Department from the carriage of letters
fell from $8,170,000 in 1839 to $2,505,000 in 1840. Though the net
revenue increased each year beginning with 1841, not until 1863 did
it again reach the point at which it had been in 1839. In 1863, the
number of letters carried was 642,000,000--almost four times the number
carried in 1840, and eight times the number carried in 1839.[57] In
short, the evidence from the penny postage was, that care must be
used in arguing from an increase of business to an increase of net
revenue; and that the prospect of a great increase in business did not
necessarily justify the incurrence of indefinitely large charges on
account of interest on capital invested.

[Sidenote: _Mr. Scudamore's Revenue Forecasts_]

Mr. Scudamore began by assuming that the Post Office would take charge
of the telegraphs on July 1, 1869; and that by that time the telegraph
companies would have developed a business of 7,500,000 messages a year.
On the basis of the traffic of 1866, and under the companies' charges,
55 per cent. of the business would consist of messages carried 100
miles or less, which would be charged 24 cents each; 30 per cent. would
be messages carried from 100 to 200 miles, being charged 36 cents each;
10 per cent. would be messages carried beyond 200 miles, which would be
charged 48 cents; and, finally, 5 per cent. would consist of messages
to and from Ireland, which would be charged from 72 cents to 96 cents.
The adoption of the uniform rate of 24 cents, irrespective of distance,
would reduce by 33 per cent. the charge on the messages sent from 100
to 200 miles, and would increase those messages by 90 per cent.; it
would reduce by 50 per cent. the charge on the messages carried more
than 200 miles, and would increase those messages by 90 per cent.; and,
finally, it would increase by 150 per cent. the number of messages
between Great Britain and Ireland. The introduction of the uniform 24
cent rate, therefore, would increase the total number of messages from
7,500,000 to 10,612,500. That last number would be further increased by
10 per cent. in consequence of the general increase of facilities, and
a material reduction in the charges made for the delivery of messages
to points outside of the free delivery areas. Thus the total number of
messages that the Post Office telegraphs would carry in the first year
would be 11,673,000, or, say, in round numbers, 11,650,000.

Since the average message would be somewhat over 20 words in length,
one might count on average receipts per message of 28 cents; so that
the 11,650,000 messages in question would bring the Post Office a gross
revenue of $3,400,000.

Mr. Scudamore next proceeded to estimate what it would cost to earn the
$3,400,000 just mentioned. He began with the total working expenses,
in 1866, of the four leading companies, namely $1,650,000. He stated
that the companies had said that if permitted to consolidate, they
could reduce expenses by $275,000 a year. But if the Post Office were
to take over the telegraphs, it would reduce the expenses by more
than the last mentioned sum, for it could use the existing Post Office
buildings, the existing staff, and so forth. Deducting numerous other
items representing expenses that the companies had incurred on account
of the operation of foreign cables and the conduct of other forms of
business that the Post Office would discontinue, Mr. Scudamore reached
the conclusion that the Post Office, in 1866, could have operated at a
total cost of $1,325,000 the plants of the four telegraph companies.

Mr. Scudamore added 10 per cent. to the last mentioned sum, in order
to cover the cost of maintaining and operating the extensions that
the State proposed to make at a cost of $1,000,000. He took 10 per
cent. because $1,000,000 was 1/11 or 1/12 of the capital invested in
the plants of the telegraph companies. That raised to $1,457,500 Mr.
Scudamore's estimate of the cost of operating the telegraphs on the
supposition of a business of 7,500,000 messages.

Mr. Scudamore then allowed 33 per cent. or $437,250, for the assumed
increase in the number of messages from 7,500,000 to 11,650,000.
He said the Post Office might safely assume that it could increase
its business by 55 per cent. at an increase of 33 per cent. in the
operating expenses, since the Electric and International Telegraph
Company recently had increased its business by 105 per cent. at an
increase of 33 per cent. in the operating expenses. Mr. Scudamore's
conclusion was that the Post Office could carry 11,650,000 messages,
yielding an income of $3,400,000, at a cost of $1,895,000, thus
obtaining a net revenue of $1,505,000.

To that sum must be added the net revenue to be obtained from the
carriage of messages for the newspaper press, $60,000; and $225,000
to be obtained from the rental of the State's cables to the several
foreign cable companies. Thus Mr. Scudamore counted on a maximum net
revenue of $1,790,000.

By similar reasoning, under the supposition that the total number
of messages should not exceed 7,500,000, Mr. Scudamore arrived at
a minimum estimated net revenue of $1,015,000. Taking the average
of the two foregoing estimates, he said the Government "might with
almost entire certainty rely upon a net revenue within a range of from
$1,000,000 to $1,800,000, the mean of which was $1,400,000." That was
for the first year; in the subsequent years the net revenue would
increase rapidly. He said: "It is the experience of all people who
have worked a large business of this kind that the cost does not by
any means increase in proportion to the increase of business; you can
always do a greater amount of business at a less proportionate cost
than you can do a smaller amount."

Mr. Goschen repeatedly asked Mr. Scudamore whether he would stand by
his estimates, and whether he deemed them moderate, adding that the
Select Committee was taking the matter almost exclusively on his
[Mr. Scudamore's] evidence. Mr. Goschen always received the strongest
assurances that the Committee might rely on the estimates submitted.[58]

Mr. Scudamore's predictions as to the growth of traffic that might be
expected from the great increase in the facilities for telegraphing,
and from the reduction of the charges by fully one-half, turned out to
be brilliant indeed. They were fully realized. The number of messages
increased from about 6,500,000 in 1869, to 9,850,000 in 1870-71, to
19,253,000 in 1874-75, and to 26,547,000 in 1879-1880.[59]

But Mr. Scudamore's predictions as to the net revenue to be obtained
from the State telegraphs turned out to be appalling blunders. In only
thirteen out of thirty-six years, from 1870-71 to 1905-06, did the net
revenue reach Mr. Scudamore's minimum estimate; in only two of those
thirteen years did it reach the maximum estimate; and in only seven of
the thirteen years did it reach the average estimate. In the period
1892-93 to 1905-06, the operating expenses aggregated $231,196,000,
while the gross receipts aggregated $229,761,000. In the latter sum
are included $8,552,000, the proceeds of the royalties paid the
Government by the British National Telephone Company for the privilege
of conducting the telephone business in competition with the State
telegraphs.[60] If that sum be excluded from the postal telegraph gross
revenues, as not having been earned by the telegraphs, it will be found
that in the period, 1892-93 to 1905-06, the operating expenses exceeded
the gross revenue by $9,987,000.

[Sidenote: _Operating Expenses under-estimated by one-half_]

Mr. Scudamore, in 1869, predicted that the operating expenses would
be 51 per cent. to 56 per cent. of the gross revenue, in the first
year of the working of the telegraphs by the Post Office; and that
they would continue to be correspondingly low. In 1875, a Committee
appointed by the Treasury reported that in consequence of the great
extension of facilities effected since 1870, "it would be difficult
for the Government to work the Telegraph Service as cheaply as did
the Companies, but a reasonable expectation might be entertained that
the expenses might be kept within 70 per cent. or 75 per cent. of the
gross revenue. That would leave a margin sufficient to pay the interest
on the debt incurred in purchasing the telegraphs."[61] As a matter
of fact, the operating expenses only once have come within the limits
fixed by the Committee of 1875; and at the close of 1900-01, they had
averaged 92.5 per cent.[62] Here again, the telephone royalties are
included in the gross receipts.

On March 31, 1906, the capital invested in the telegraphs was
$84,812,000.[63] To raise that capital, the Government had sold
$54,300,000 three per cent. bonds at an average price of about
92.3;[64] and for the rest, the Government had drawn upon the current
revenue raised by taxation.

[Sidenote: _Aggregate Telegraph Deficit_]

The net revenue earned by the telegraphs covered the interest on
the bonds outstanding, in 1870-71, and in the years 1879-80 to
1883-84. On March 31, 1906, the sums annually paid by the Government
by way of interest that had not been earned by the telegraphs, had
aggregated $22,530,000, or 26.5 per cent. of the capital invested in
the telegraphs.[65] Upon the sums invested since 1874, aggregating
$34,534,000, the Government has received no interest.

[Sidenote: _Parliament Responsible for Deficits_]

The statement is commonly made, and widely accepted, that the financial
failure of the State telegraphs is due to the excessive price paid for
the plant. But that statement overlooks two facts: that since 1892-93
the telegraphs have not earned operating expenses; and that in 1880-81
the telegraphs became abundantly able to earn the interest even upon
their immoderate capitalization.[66] The statement in question also
overlooks the fact that the telegraphs easily could have maintained the
position reached in 1880-81, had not the House of Commons taken the
reins out of the hands of the successive Governments of the day. The
House of Commons after 1881 fixed the wages and salaries to be paid
the Government telegraph employees in accordance with the political
pressure those employees were able to bring, not in accordance with
the market value of the services rendered by the employees. The House
of Commons also reduced the tariff on telegrams from 24 cents for
20 words, to 12 cents for 12 words. It took that course against the
protests of the Government of the day, and cut deep into the margin of
profit of the telegraph department.

The fact that the House of Commons after 1880-81 took the reins out
of the hands of the successive Governments of the day, in no way
diminished Mr. Scudamore's responsibility for the appalling errors
into which he fell when he forecast the financial outcome of the
nationalization of the telegraphs. Mr. Leeman, of the Parliamentary
Select Committee of 1868, expressly asked Mr. Scudamore: "You do not
think there is any fear of the cost being increased by the salaries
being much increased under the management of the Post Office?" Mr.
Scudamore without hesitation replied in the negative, though he had
just stated that in the Post Office and in all Government departments
the pay of the lower grades of employees was somewhat higher than it
was in commercial and industrial life.[67] Moreover, Mr. Scudamore, as
one of the two chief executive officers of the Post Office, must have
been aware that the Government was neither perfectly free to promote
men according to their merit, and irrespective of length of service,
nor free to discharge men who were comparatively inefficient and
lax in the discharge of their duties. He must have known that those
disabilities made it impossible for the Post Office to work as cheaply
as private enterprise worked.

As for the House of Commons forcing on the Government the 12 cent
rate for messages of 12 words, that action was due largely to the
expectations raised by Mr. Scudamore himself in 1868 and 1869, that the
nationalization of the telegraphs would soon give the public a twelve
cent rate.

* * * * *

[Sidenote: _Mr. W. S. Jevons' Disillusionment_]

Mr. W. Stanley Jevons, the eminent statistician and economist, who,
in 1866 to 1869, had warmly supported the proposal to nationalize the
telegraphs, in 1875 pointed out that while the postal telegraph traffic
had increased 81 per cent. in the period 1870 to 1874, the operating
expenses had increased 110 per cent. He said: "The case is all the more
hopeless, since the introduction of the wonderful invention of duplex
telegraphy has doubled at a stroke, and with very little cost, the
carrying power of many of the wires."[68]

In 1870 each wire afforded one channel for communication; in 1895 it
afforded two channels under the Duplex system, four channels under
the Quadruplex system, and six channels under the Multiplex system.
In 1870 the maximum speed per minute was 60 to 80 words. In 1895 the
fixed standard of speed for certain circuits was 400 words, while a
speed of 600 words was possible of attainment. The "repeaters" used for
strengthening the current on long circuits also were greatly improved
after 1870.[69]

FOOTNOTES:

[48] _Report by Mr. Scudamore on the Reorganization of the Telegraph
System of the United Kingdom_, January, 1871.

Number of telegraph offices before and after the transfer of the
telegraphs to the State:

+================+========+========+
| | 1869 | 1870 |
+----------------+--------+--------+
|London | 95 | 334 |
+----------------+--------+--------+
|Birmingham | 10 | 14 |
+----------------+--------+--------+
|Edinburgh | 9 | 15 |
+----------------+--------+--------+
|Leeds | 10 | 18 |
+----------------+--------+--------+
|Glasgow | 13 | 19 |
+----------------+--------+--------+
|Manchester | 21 | 32 |
+================+========+========+

This table does not indicate fully the expense incurred by the State
in providing local telegraph systems. Under the companies the offices
were all concentrated in the heart of the city; under the Post Office
administration the offices were spread throughout the city and suburbs.

[49] _First Report from the Committee on Public Accounts_, 1873;
Appendix, p. 118; and _Report from the Committee on Public Accounts_,
1874; Appendix, p. 159 and following.

[50] _Report by Mr. Scudamore on the Reorganization of the Telegraph
System of the United Kingdom_, January, 1871, p. 43.

[51] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; q. 1,864 and 1,922.

[52] _Hansard's Parliamentary Debates_, July 5, 1869, p. 1,217.

[53] _Transactions of the Manchester Statistical Society_, Session
1866-67.

[54] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; q. 1,922 and 94; and _First Report from the
Committee on Public Accounts_, 1873; Appendix, p. 96.

[55] _Report from the Select Committee on Post Office (Telegraph
Department)_, 1876, p. xi. "The Committee have not received any full
and satisfactory explanation of these great differences between the
estimated expenditure of 1869 and the actual expenditure incurred up to
1876."

[56] _Miscellaneous Statistics of the United Kingdom_, current issues
from 1872 to 1882.

Telegraph Stations open to the public:

===================+======+======+======+=======+=======+=======+=======
| 1869 | 1871 | 1872 | 1873 | 1874 | 1878 | 1880
-------------------+------+------+------+-------+-------+-------+-------
Telegraph Companies| 2,155[A] 0| 0| 0| 0| 0| 0
Post Office | | | | | | |
Telegraphs | 0| 2,441| 3,369| 3,659| 3,756| 3,761| 3,929
Railway Stations[B]| 1,226| 1,833| 1,804| 1,815| 1,816| 1,555| 1,407
|------+------+------+-------+-------+-------+-------
| 3,381| 4,274| 5,173| 5,474| 5,572| 5,316| 5,336
| | | | | | |
Miles of Line |21,751| ? |22,000[C] ? | 24,000[D] ? [E]23,156
Miles of Wire |90,668|68,998|91,093|104,292|106,730|114,902|114,242
===================+======+======+======+=======+=======+=======+=======
[A] In 1,882 places.

[B] For the benefit of the traveling public, and of persons
residing in the immediate vicinity of railway stations, the
Post Office made arrangements whereby the railway companies
received messages from the public for transmission to the
postal telegraphs, and received messages from the postal
telegraphs for delivery to the public.

[C] _Report of the Postmaster General_, 1895, p. 36.

[D] _The Fortnightly Review_, December, 1875, W. S. Jevons.

[E] _Report of the Postmaster General_, 1880, p. 16.

[57] The penny postage was introduced on December 5, 1839.

==========+===============+==============+===========
|Letters Carried| Gross Revenue|Net Revenue[A]
| | $ | $
----------+---------------+--------------+-----------
1839 | 76,000,000 | 11,955,000 | 8,170,000
1840 | 169,000,000 | 6,795,000 | 2,505,000
1845 | 271,000,000 | 9,440,000 | 3,810,000
1850 | 347,000,000 | 11,325,000 | 4,020,000
1859 | 545,000,000 | 16,150,000 | 7,230,000
1863 | 642,000,000 | 19,350,000 | 8,950,000
==========+===============+==============+===========
[A] The British Post Office does not charge itself with
interest upon the capital invested in the postal business; it
charges itself only with interest upon the capital borrowed on
account of the telegraphic business.

[58] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; Appendix, pp. 27 and 28; and q. 1,813 and
following, and 2,439 and following. Compare: _Hansard's Parliamentary
Debates_, July 5, 1869, p. 1,219 and following, the Marquis of
Hartington, Postmaster General.

[59] Number of messages.

1869 6,500,000 (estimated)
1870-71 9,850,000
1871-72 12,474,000
1874-75 19,253,000
1879-80 26,547,000
1884-85 33,278,000
1889-90 62,403,000
1894-95 71,589,000
1899-1900 90,415,000
1905-1906 89,478,000

In 1869 Mr. Scudamore revised his estimate of the number of messages in
1870-71, reducing it to 8,815,400. _Hansard's Parliamentary Debates_,
July 5, 1869, p. 1,219, the Marquis of Hartington, Postmaster General.

[60] Garcke: _Manual of Electrical Undertakings_. The current issues
report the amount of these royalties. _The Report of the Postmaster
General_, 1885, p. 9, and _Parliamentary Paper_, No. 34, Session of
1901, state that these royalties are included in the gross revenue of
the telegraphs.

[61] _Report of a Committee appointed by the Treasury to investigate
the causes of the increased Cost of the Telegraphic Service since the
Acquisition of the Telegraphs by the State_, 1875, p. 6.

[62] _Parliamentary Paper_, No. 295, Session of 1902.

Proportion borne by operating expenses to gross revenue, after
excluding from operating expenses all expenses properly chargeable
to capital account. The capital account of the telegraphs having
been closed in September, 1873, the Post Office, since that date,
has charged to operating expenses all expenditures on account of
extensions, the purchase of sites, and the erection of buildings.

Average percentage
of operating expenses Range

1870-71 57.24
1871-72 78.94
1872-73 to 1874-75 88.77 85.13 to 92.40
1875-76 to 1884-85 79.34 72.27 to 85.50
1885-86 to 1891-92 91.31 87.72 to 95.30
1892-93 to 1900-01 98.30 95.43 to 101.07
1901-02 to 1905-06 100.38 99.69 to 108.06

_Parliamentary Paper_, No. 34, Session of 1876. Lord John Manners,
Postmaster General: "In the first two years after the transfer
the expenditure was kept down, because no charge was raised for
maintenance, as it took the form of renewal of the plant of the late
companies, which, between 1868 and 1870, had, in some instances, been
allowed to fall into decay, and was therefore considered properly
chargeable against capital."

[63] That sum was made up as follows:

Telegraph companies $29,237,000
Railway companies 10,000,000
Extensions: 1870 to 1873 11,041,000
Extensions: 1874 to 1906 34,534,000
-----------
$84,812,000

[64] _Parliamentary Paper_, No. 267, Session of 1870.

[65] The subjoined table gives, for successive periods, the average
capital sums upon which the net revenue earned by the telegraphs would
have paid the interest; and also the average sums actually invested
in the telegraphs in those periods. The first column of the table is
constructed on the assumption that the interest paid by the State for
borrowed money was 3.25 per cent. from 1870-71 to 1883-84; 3 per cent.
from 1884-85 to 1888-89; and 2.75 per cent. from 1889-90 to 1900-01.

The ten million dollars paid to the railway companies some time between
1873 and 1879 are not included in the sum put down for the average
capital investment in 1875-76 to 1877-78, since it has been impossible
to assign that payment to specific years.

The results of the year 1870-71 should be ignored, since the cost of
the maintenance of the telegraphs was charged to capital account in the
year in question.

The net revenue The average
sufficed to pay capital actually
interest on: invested was:
$ $
1870-71 52,710,500 33,790,000
1871-72 to 1874-75 20,090,000 40,045,000
1875-76 to 1877-78 31,305,000 41,715,000
1878-79 to 1884-85 52,785,000 54,510,000
1885-86 to 1888-89 24,646,000 60,545,000
1889-90 to 1891-92 44,033,000 63,446,000
1892-93 to 1905-06 Nil 74,243,000

[66] The net revenue sufficed to pay the interest on:

$
1877-78 30,165,000
1878-79 41,190,000
1879-80 51,310,000
1880-81 69,455,000
1881-82 55,055,000
1886-87 14,745,000

[67] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; q. 3,296 to 3,302.

[68] _The Fortnightly Review_, December, 1875.

[69] _Report of the Postmaster General_ for 1895; Historical Outline of
the Telegraph Service since 1870.

CHAPTER VI
THE PARTY LEADERS IGNORE THEIR FEAR OF AN ORGANIZED CIVIL SERVICE

One of the most extraordinary of the numerous astounding episodes in
connection with the nationalization of the telegraphs was the fact that
in the debates in the House of Commons was not even raised the question
of possible danger arising from increasing enormously the number of
civil servants. That is the more astounding, since, in 1867 and 1868,
prominent men in both political parties had grave misgivings as to
the future relations between the State and its employees, even though
those employees who were in the Customs Department, the Inland Revenue
Department, and the Post Office were at the time disfranchised.

[Sidenote: _Mr. Disraeli on Civil Servants_]

In July, 1867, while the House of Commons was passing the
"Representation of the People Bill," Sir Harry Verney, a private
member, moved the addition of a clause to enable public officers
connected with the collection of the revenue to vote at elections.[70]
The Chancellor of the Exchequer, Mr. Disraeli, asked the House not
to accept the Amendment. He said: "He wished also to recall to the
recollection of the committee a Treasury Minute which had been placed
on the table, in which Minute the Government had drawn attention to the
impropriety and impolicy of officers in those branches of the public
service to which the honorable baronet [Sir Harry Verney] had referred,
exercising their influence over Members of Parliament, in order to urge
upon the Government an increase of their salaries. Even at the present
time an influence was exerted which must be viewed with great jealousy,
and every Government, however constituted, would find it necessary to
use its utmost influence in restricting overtures of that description.
But what would be the position of affairs if these persons--so numerous
a body--were invested with the franchise. From the experience of what
was passing in this city--and he wished merely to intimate, and not to
dwell upon the circumstance--he was led to believe the result would
be that there would be an organization illegitimately to increase the
remuneration they received for their services--a remuneration which,
in his opinion, was based upon a just estimate. He did not deny that
the class referred to by the honorable baronet were entirely worthy of
public confidence, but the conferring the franchise upon them would
place them in a new position, and would introduce into public life new
influences which would not be of a beneficial character. He trusted
therefore that the committee would not sanction the proposal of the
honorable baronet."

The amendment was lost; and in the following year, 1868, Mr. Monk, a
private member, carried against the Government of the day, a bill to
enfranchise the revenue officers.[71]

[Sidenote: _The Chancellor of the Exchequer on Civil Servants_]

The Chancellor of the Exchequer, Mr. G. W. Hunt, said he felt bound
to move that the bill be committed this day three months--_i. e._,
be rejected. He said it was an anomaly in the laws that the dockyard
laborers were not disfranchised. "If the matter were inquired into
calmly and dispassionately, he was not at all sure that a good case
might not be made out for affixing to them the same disability that
is now attached to the revenue officers. The fact did not at all tend
to the purity or the impartiality of electors in places where many of
these men were employed, and strenuous efforts were made by members
representing them to increase the privileges of the dockyard men and
the number of persons employed, which did not tend to economy or the
proper husbanding of the national resources. Continual applications
were made by these gentlemen [the employees in the Revenue Departments]
respecting their position and salaries, and these applications had of
late years taken a very peculiar form, being not merely made through
the heads of departments, or by simple memorial to the treasury,
but in the form of resolutions at public meetings held by them, and
communications to Members of Parliament by delegates appointed to
represent their interests. He put it to the House, whether, in the
circumstances supposed, the influence possessed by them would not
be very considerably increased, and whether the Government of the
day would not have far greater difficulty in administering these
departments with respect to the position and salaries of the officers
concerned, if the measure were carried."[72]

[Sidenote: _Mr. Gladstone's Warning_]

Mr. Gladstone said: "The suggestion he would make would be that
Parliament should give the vote, and, at the same time, leave it in
the discretion of the Government of the day to inhibit any of these
officers from taking any part in politics beyond giving their simple
vote.... Again, before they proceeded to lay down the principle of
general enfranchisement, one thing to be considered was the very
peculiar relations between the revenue officers and the Members of
that House. There it was necessary to speak plainly. He was not afraid
of Government influence in that matter, nor of an influence in favor
of one political party or another; but he owned that he had some
apprehension of what might be called class influence in that House,
which in his opinion was the great reproach of the Reformed Parliament,
as he believed history would record. Whether they were going to emerge
into a new state of things in which class influence would be weaker he
knew not; but that class influence had been in many things evil and a
scandal to them, especially for the last fifteen or twenty years; and
he was fearful of its increase in consequence of the possession of the
franchise, through the power which men who, as members of a regular
service, were already organized, might bring to bear on Members of
Parliament. What, he asked, was the Civil Service of this country?
It was a service in which there was a great deal of complaint of
inadequate pay, of slow promotion, and all the rest of it. But, at the
same time, it was a service which there was an extraordinary desire to
get into. And whose privilege was it to regulate that desire? That of
the Members of that House...."

FOOTNOTES:

[70] _Hansard's Parliamentary Debates_, July 4, 1867, p. 1,032 and
following.

[71] _Hansard's Parliamentary Debates_, June 10, 1868, p. 1,352 and
following; June 12, p. 1,533 and following; and June 30, 1,868, p.
390 and following. Compare also: _Parliamentary Paper_, No. 325,
Session 1867-68: _Copy of Report to the Treasury by the Commissioners
of Customs and Inland Revenue upon the Revenue Officers' Disabilities
Bill_.

[72] The measure was carried against the Government by a vote of 79 to
47.

CHAPTER VII

THE HOUSE OF COMMONS IS RESPONSIBLE FOR THE FINANCIAL FAILURE OF THE
STATE TELEGRAPHS

Sir S. Northcote, Chancellor of the Exchequer in Mr.
Disraeli's Ministry of 1874 to 1880, is disillusioned. The
State telegraphs become self-supporting in 1879-80. The House
of Commons, under the leadership of Dr. Cameron, M. P. for
Glasgow, overrides the Ministry and cuts the tariff almost in
two. In 1890-91 the State telegraphs would again have become
self-supporting, had not the House of Commons, under pressure
from the civil service unions, increased wages and salaries.
The necessity of making money is the only effective incentive
to sound management.

The consideration of the reasons for the financial failure of the
State telegraphs may begin with the discussion of the effect of the
building of unremunerative extensions. In 1873 the Treasury Department
forced the Post Office Department to abandon the doctrine that every
place with a money order issuing post office was of right entitled
to a telegraph office. The treasury in that year adopted the policy
of demanding a guarantee from private individuals whenever it did
not care to assume the risk of a telegraph office failing to be
self-supporting.[73] The new policy, of course, applied only to places
not yet provided with telegraphic service, for the withdrawal of an
established service would have led "to an immense amount of public
inconvenience and agitation that the Government would have been unable
to resist."[74]

[Sidenote: _Sir S. Northcote's Disillusionment_]

In speaking of the policy of requiring guarantees in order to check the
pressure brought by the House of Commons for additional telegraphic
services, the Chancellor of the Exchequer, Sir Stafford Northcote,
in 1875, said: "The Government cannot give the answer that private
companies could, and I am sure did, give. This is a point worthy of
consideration, not so much in regard to the telegraph service itself,
in which we are now fairly embarked, and of which we must make the
best we can, as in reference to suggestions of acquisitions of other
forms of property, and the conduct of other kinds of business, in which
I hope the House will never be led to embark without very carefully
weighing the results of this remarkable experiment."[75]

The guarantee in question, which had to be given by private
individuals, covered: the annual working expenses; interest on the
capital investment; sinking fund payments which should repay in seven
years the capital invested; and a margin for certain contingencies.[76]
In August, 1891, was abolished the provision requiring a guarantee of
the repayment of the capital in seven years.[77] At the same time, the
local governments were authorized to give the guarantee that continued
to be required.[78] In 1897, upon the occasion of Her late Majesty's
Diamond Jubilee, the Treasury authorized the Post Office to assume
one-half of the burden of non-paying telegraphic services; and since
May 1, 1906, the Post Office assumes two-thirds of that burden.[79]

The guarantees demanded after 1873 proved an effective check upon
log-rolling. For example, in 1876, Catrine, in Ayrshire, with a
population of 2,000, still was without telegraph service, while
Tarbolton, in Ayrshire, population 500, had acquired such service
previous to 1873.[80] In the period from 1874 to 1878 the number of
postal telegraph offices increased only from 3,756 to 3,761.

Before leaving this subject, it is necessary to warn the reader
against misleading tables published in several official documents,
and purporting to show that non-paying offices rapidly became
self-supporting.[81]

Those tables are constructed on the basis of including in the cost
of telegraph offices only the allowance to the local postmaster for
telegraph work, and the cost of maintaining the instruments in the
office, and of excluding the cost of maintaining the wire, the cost
of additional force required at the central station in London and at
the district centres because of the large number of outlying branches,
as well as the interest on the capital invested. Those omissions led
the Treasury Committee of 1875 to say: "We fear the full cost of
working these numerous and unremunerative offices is not realized
[appreciated]." In 1888, Mr. C. H. B. Patey, Third Secretary to the
Post Office, was asked by a Select Committee of Parliament: "Where
you have established telegraph offices at money order offices under
guarantee from individuals interested, do you find that eventually
these offices pay?" He replied: "No; in exceedingly few instances do
they pay. The guarantee has continued, and after seven years we have
got a fresh guarantee in order to continue the office."[82] Mr. Patey's
testimony is corroborated by the continued, and successful, agitation
of the House of Commons for the reduction of the guarantee demanded by
the Treasury.

The second reason for the financial failure of the State telegraphs is,
that while the precipitate reductions made in the rates charged to the
public led to a great increase in the number of messages transmitted,
that very increase of business was accompanied by such augmented
operating expenses, that some years elapsed before the reduced average
margin of profit per message carried sufficed to pay the interest on
the immoderate capitalization of the State telegraphs. The increase in
the operating expenses was in part inevitable; in part it was due to
the waste inherent in all business operations conducted by executive
officers who hold office, either at the pleasure of legislative bodies
elected by manhood suffrage, or at the pleasure of large bodies of
voters.

In 1876, Mr. C. H. B. Patey, Principal Clerk in the Post Office
Department, stated that the average of the operating expenses per
telegraphic message transmitted was 16 cents to 18 cents.[83] At
that time, with a traffic of 21,000,000 messages a year, and average
receipts per message of 28 cents, the net revenue of the telegraphs was
$1,060,000, while the interest on the bonds outstanding was $1,475,000.
In 1879-80, with a traffic of 24,500,000 messages, average receipts
per message of 26 cents, the telegraphs yielded a net revenue of
$1,667,000, while the interest on the bonds outstanding was $1,632,000.
And in 1880-81, with a traffic of 27,300,000 messages, the net revenue
rose to $2,257,000, while the interest on the bonds outstanding
remained at $1,632,000. A large part of that improvement was due to a
diminution in the waste with which the telegraphs had been conducted
in 1874 to 1878. The nature and the extent of that waste are indicated
in the fact that the number of clerks, telegraphists, and subordinate
engineers was reduced from 6,783 in 1876, to 6,220 in 1880,[84] at the
same time that the number of telegraph offices was increased from 3,741
to 3,929, and the number of messages was increased from 21,000,000 to
24,500,000.

[Sidenote: _The Telegraphs become self-supporting_]

In 1880-81, the telegraphs earned 3.25 per cent. on $69,455,000,[85]
which was $16,180,000 in excess of the total capital invested in them.
Under conditions which shall be described on a subsequent page, the
Government, "very much at the instance of the House of Commons,"[86]
raised wages and salaries, so that, in the period from 1880-81 to
1884-85, the expenses on account of salaries and wages increased
$1,100,325, while the gross receipts increased only $752,635. In
1884-85, the net revenue sufficed to pay the interest at 3.25 per cent.
on $45,710,000 only.

In the meantime, on March 29, 1883, the House of Commons had carried
against the Government of the day, the resolution of Dr. Cameron,
Member of Parliament from Glasgow: "That the time has arrived when the
minimum charge for Inland Postal Telegrams should be reduced to 12
cents."[87] Dr. Cameron said: "He brought forward the motion--and he
did so last year[88]--because he was absolutely opposed to the taxation
of telegrams [_i. e._, to raising more revenue from the telegraphs
than was requisite to paying the interest on the bonds outstanding];
and he believed that taxation could be levied in no other manner that
would be so prejudicial to the commerce, intercourse, and convenience
of the country. At the present moment there was practically no taxation
of telegrams, or, at all events, the principle of the taxation of
telegrams had not been affirmed. The surplus revenue [above the
interest on the debt outstanding] earned up to the present time had
been so small that it was impossible by sacrificing it to confer any
substantial advantage upon the public. But the telegraph revenue was
increasing; and it appeared to him that they had now arrived at a
point where a remission of taxation must be made in the shape of extra
facilities [_i. e._, reduced charges] for the public, or the vicious
principle of the taxation of telegrams for the purpose of revenue must
be affirmed. They had, it might be contended, not yet exactly arrived
at that point, but they were remarkably near it; and his object in
bringing forward the motion from year to year had been to afford the
Government no excuse for allowing the point to be passed, but to bring
up the subject every year; and the moment it was admitted that a change
could be made without loss to the taxpayers he should ask the House to
indicate its opinions that the change might be made.... He maintained
that the principle of taxing telegrams was most erroneous. It was one
of the worst taxes on knowledge[89]--a tax on economy, on time, and
on the production of wealth. Instead of maintaining a price which was
prohibitory not only to the working classes but also to the middle
classes, they ought to take every means to encourage telegraphy. They
ought to educate the rising generation to it; and he would suggest to
the Government that the composing of telegrams would form a useful part
of the education in our board schools."

The Chancellor of the Exchequer, Mr. Childers, "hoped the House
would not agree to the motion" even if it were ready to accept Dr.
Cameron's estimate that the immediate reduction in the net revenue
would not exceed $850,000. "He had heard with surprise in the course
of the debate some of the statements which had been made in regard to
the unimportance of large items of expenditure [and of revenue]; and he
was all the more surprised when he remembered the great anxiety which
had been expressed during the present session in regard to the Public
Expenditure, and the care which ought to be taken over it."[90]

Dr. Cameron, in the course of his speech in 1882, quoted a statement
recently made by Mr. Fawcett, Postmaster General, to the effect that
there was an average of 80,000 telegrams a day for 5,600 offices, or
14 telegrams per office. The representative from Glasgow added: "The
state of things which they now had, therefore amounted to this--that
from each telegraph office was sent a number of messages which afforded
a little over half an hour's work per day for the operator. It would,
therefore, at once be seen that there was ample room for increased
business, without any increase of expenditure."[91] The foregoing
argument overlooked the fact that the wires between the large cities
were being worked to something like their full capacity; and that the
low average of 14 messages per office was due solely to the existence
of hundreds of offices in small places that had very little traffic.
And shortly after the House of Commons had passed Dr. Cameron's
resolution, in 1883, against the protest of the Government, the
Treasury authorized the Post Office to spend $2,500,000 in putting up
15,000 miles of additional wires, and in otherwise preparing for the
great increase in business that would arise between the larger towns in
consequence of the reduction of the tariff.[92] And by July 5, 1885,
three months before the date set for putting into force the reduced
rate, the Post Office had engaged 1,202 additional telegraphists
and learners,[93] to assist in doing the business which Dr. Cameron
in 1882, had said could be done "without any great increase of
expenditure."

[Sidenote: _Tariff is cut almost in two_]

On March 30, 1885, Mr. Shaw-Lefevre, Postmaster General, brought in a
bill to give effect to Dr. Cameron's resolution of March 29, 1883.[94]
The measure provided for a rate of 12 cents for not exceeding 12
words, address to be counted, and one cent for each additional word.
The Postmaster General began by reminding the House of Commons that
Dr. Cameron's resolution had been carried against the Government, and
by a considerable majority. That the Post Office has spent $2,500,000
in preparing for the increase of business anticipated from the 12
cent tariff. That the loss of net revenue was estimated at $900,000
for the first year; and that it would take four years to recover
that loss. That since Dr. Cameron's resolution had been passed, the
financial position of the telegraph department had grown "decidedly
worse," the net revenue having fallen from $2,200,000 to $1,275,000,
the latter sum yielding barely 2.5 per cent. on the capital invested
in the telegraphs, $55,000,000. Mr. Shaw-Lefevre said the decrease in
the net revenue had been due "to the very considerable additions to
the salaries of the telegraphists and other officers made two or three
years ago very much at the instance of honorable Members of the House,
and which Mr. Fawcett [the then Postmaster General] considered to be
absolutely necessary," and also to increased cost of maintenance[95]
arising from the necessity of replacing worn-out plant. The Postmaster
General also drew attention to the fact that a new and dangerous factor
had appeared: the competition of the telephone.[96]

The Bill became law; and the 12 cent tariff went into effect on
October 1, 1885, the close of the first half of the fiscal year
1885-86. The number of messages jumped from 33,000,000 to 50,000,000,
while the net revenue dropped from $1,370,000 to $440,000. In the next
three years, 1887-88 to 1889-90, the number of messages increased to
62,400,000, and the net revenue rose to $1,451,000, or within $431,000
of the interest on the capital invested, $62,748,000. In the following
year, 1890-91, the messages continued to increase at the rate at which
they had increased in the three preceding years, and the net revenue
would once more have sufficed to pay the interest on the capital
invested, had the operating expenses not been swollen by increases in
wages and salaries granted under pressure brought by the telegraph
employees upon the House of Commons. The raising of salaries and wages
continued through the subsequent years; and in the thirteen years
1893-94 to 1905-06, the State telegraphs have earned the operating
expenses in five years only.[97]

In 1888, the _Select Committee on Revenue Departments Estimates_
reported as follows: "Your Committee are of the opinion that the
reasons urged against treating the Post Office as a commercial business
are not applicable in anything like the same degree to the Telegraph
Department; and that the increasing annual deficit in the accounts of
the latter cannot be viewed otherwise than with grave concern. Looking
to the increasing costliness of the service as a whole, and to the
constant pressure upon it of demands for increased and unprofitable
expenditure, your committee deem it their duty to call attention to
the fact that the Department of the Postmaster General, in all its
branches, is a vast Government business, which is most likely to
continue to be conducted satisfactorily, if it should also continue
to be conducted with a view to profit [beyond the payment of interest
on the debt outstanding], as one of the revenue yielding departments
of the State. Excessive expenditure appears to your committee to be
sooner or later inevitable in a great Government business which is not
administered with a view to an ultimate profit to the State."

=========+============+============++=========+============+===========
Year | Number of |Net Revenue,|| Year | Number of |Net Revenue
| Messages | $ || | Messages | $
---------+------------+------------++---------+------------+-----------
1884-85 | 33,278,000 | 1,371,000 || 1894-95 | 71,589,000 | -50,000
1885-86 | 39,146,000 | 839,000 || 1895-96 | 78,840,000 | 646,000
1886-87 | 50,244,000 | 442,000 || 1896-97 | 79,423,000 | 678,000
1887-88 | 53,403,000 | 614,000 || 1899-00 | 90,415,000 | 326,000
1888-89 | 57,765,000 | 1,061,000 || 1901-02 | 90,432,000 | -848,000
1889-90 | 62,403,000 | 1,451,000 || 1902-03 | 92,471,000 | -548,000
1890-91 | 66,409,000 | 1,259,000 || 1903-04 | 89,997,000 | -1,530,000
1891-92 | 69,685,000 | 922,000 || 1904-05 | 88,969,000 | -917,000
1892-93 | 69,908,000 | 94,000 || 1905-06 | 89,478,000 | -63,500
=========+============+============++=========+============+===========

The minus sign denotes an excess of operating expenses over receipts.

Had the House of Commons permitted the successive Governments of the
day to act upon the doctrine contained in the foregoing quotation, the
State telegraphs would have been self-supporting ever since the year
1880-81. They would have paid the full interest upon the whole capital
invested in them; in spite of the high prices paid to the telegraph
companies and the railway companies for the sale of those companies'
plants and rights.

FOOTNOTES:

[73] _Report from the Select Committee on Revenue Estimates_, 1888; q.
2,396, Mr. C. H. B. Patey, Third Secretary to the Post Office.

[74] _Report from the Select Committee on Revenue Estimates_, 1888; q.
950, Sir S. A. Blackwood, Secretary to the Post Office.

[75] _Hansard's Parliamentary Debates_, April 15, 1875, p. 1,025.

[76] _Hansard's Parliamentary Debates_, August 4, 1887, p. 1,126, the
Marquis of Salisbury, Prime Minister.

[77] _Hansard's Parliamentary Debates_, August 31, 1893, p. 1,580, Mr.
A. Morley, Postmaster General.

[78] _Hansard's Parliamentary Debates_, May 27, 1892, p. 134, Sir James
Fergusson, Postmaster General.

[79] _Hansard's Parliamentary Debates_, August 9, 1901, p. 289, Mr.
Austen Chamberlain, Postmaster General; and May 9, 1906, p. 1,294, Mr.
Sydney Buxton, Postmaster General.

[80] _Report from the Select Committee on Post Office_ (_Telegraph
Department_), 1876, Mr. C. H. B. Patey, Principal Clerk in the Post
Office; q. 3,705 and following, and 2,021.

[81] _Report of a Committee appointed by the Treasury to investigate
the Causes of the Increased Cost of the Telegraph Service since
the Acquisition of the Telegraphs by the State_, 1875, p. 8; and
_Parliamentary Paper_, No. 34, Session of 1876, p. 6.

NON-PAYING TELEGRAPH OFFICES
========+========+===========+========+=======+=======
| |The rest of| | |
| London | England |Scotland|Ireland| Total
| | and Wales | | |
--------+--------+-----------+--------+-------+-------
1872 | 10 | 417 | 40 | 261 | 728
1874 | 7 | 303 | 28 | 111 | 440
1875 | 0 | 150 | 6 | 72 | 228
========+========+===========+========+=======+=======

[82] _Report from the Select Committee on Revenue Departments
Estimates_, 1888; q. 2,621.

[83] _Report from the Select Committee on Post Office_ (_Telegraph
Department_), 1876; q. 2,712, 2,713 and 3,734.

Average operating expenses per telegram: Cents

At office where handed in 2
For receipt at transmitting office 3
For forwarding from transmitting office 3
For receipt at delivery office 3
For delivery to addressee 2
Stationery forms used 1
Rent of offices, way-leaves, and maintenance of wires and
instruments 2 to 4
--------
16 to 18

[84] _Miscellaneous Statistics of the United Kingdom_, current issues.

[85] The net revenue
Messages paid 3.25 per cent.
interest on:
$
1875-76 20,974,000 32,600,000
1877-78 22,172,000 30,165,000
1878-79 22,490,000 41,190,000
1879-80 24,500,000 51,310,000
1880-81 27,300,000 69,455,000
1884-85 33,300,000 45,710,000

[86] _Hansard's Parliamentary Debates_, March 30, 1885, p. 1,072 and
following, Mr. Shaw-Lefevre, Postmaster General, 1883-84.

[87] _Hansard's Parliamentary Debates_, March 29, 1883, p. 995 and
following.

[88] _Hansard's Parliamentary Debates_, June 26, 1882, p. 422, Dr.
Cameron moves the resolution: "That the working of the Postal Telegraph
Service, with a view to the realization of profit, involves a Tax
upon the use of Telegrams; that any such Tax is inexpedient, and that
the profits derived from the service is now such that the charges for
Inland Telegrams should be reduced."

[89] Ever since the nationalization of the telegraphs the newspaper
press messages had been carried at special rates which did not cover
operating expenses.

[90] _Hansard's Parliamentary Debates_, March 29, 1883, p. 1,018 and
following.

[91] _Hansard's Parliamentary Debates_, June 26, 1882, p. 427.

[92] _Treasury Minute_, June 14, 1883, _with Regard to Reduction of the
Minimum charge for Post Office Telegrams_; and _Hansard's Parliamentary
Debates_, April 24, 1884, p. 499, the Chancellor of the Exchequer; and
April 24, p. 569, and August 7, p. 138, Mr. Fawcett, Postmaster General.

[93] _Hansard's Parliamentary Debates_, July 5, 1885, p. 1,825, Lord
John Manners, Postmaster General.

[94] _Hansard's Parliamentary Debates_, March 30, 1885, p. 1,072 and
following.

[95] The increase in salaries and wages in 1880-81 to 1884-85 was
$1,100,000, and the increase in the cost of maintenance was $538,000.

[96] Compare also _Hansard's Parliamentary Debates_, June 6, 1887, p.
1,180, Mr. Shaw-Lefevre.

[97] See table on page 111.

CHAPTER VIII

THE STATE TELEGRAPHS SUBSIDIZE THE NEWSPAPER PRESS

Before proceeding with the further discussion of the intervention of
the House of Commons in the details of the administration of the State
telegraphs, it is necessary to review briefly the tariff on messages
for the newspaper press.

Before the telegraphs had been acquired by the State, the telegraph
companies maintained a press bureau which supplied the newspapers with
reports of the debates in Parliament, foreign news, general news, a
certain amount of London financial and commercial intelligence, and
the more important sporting news. While Parliament was in session,
the messages in question averaged about 6,000 words a day; during the
remainder of the year they averaged about 4,000 words daily. The annual
subscription charges for the aforesaid services ranged from $750 to
$1,250. Before the Select Committee of 1868, the representatives of
the newspapers asserted that those subscription charges yielded the
telegraph companies, on an average, 8 cents per 100 words. They further
asserted that the telegraph companies ascribed 62.5 per cent. of the
cost of the press bureau to the transmission of the news; and 37.5 per
cent. to the collecting and editing of the news.[98] But neither the
representatives of the press, nor the Select Committee itself, called
any representatives of the telegraph companies to testify upon these
latter points.

The subscribers to the companies' press bureau service also were
allowed to send messages at one-half the rate charged to the general
public; and in case the same newspaper message was sent to several
newspapers in the same town, the charge for each address after the
first one was 25 per cent. of the sum charged the first addressee.
By coöperation, therefore, the newspapers in the larger towns were
able to obtain considerable reductions from the initial charge,
which, as already stated, was 50 per cent. of the tariff charged the
general public.[99] Apparently, however, little use was made of these
privileges. In 1868, for instance, the subscriptions to the press
bureau aggregated $150,000, whereas the sums paid for messages to
individual newspapers aggregated only $10,000.[100]

[Sidenote: _The Newspapers' Grievance_]

The newspaper proprietors admitted that the charges for the press
bureau service were entirely reasonable; but they desired to organize
their own press bureaux on the ground that they were the better judges
of what news the public wanted. Since the telegraph companies would not
give up their press bureau, the newspaper proprietors joined in the
agitation for the nationalization of the telegraphs.[101]

As soon as the Government began to negotiate with the telegraph
companies for the purchase of their plants, the newspaper proprietors
organized a committee to protect their interests and to represent them
before the Select Committee to which had been referred the Electric
Telegraphs Bill of 1868. That Bill had said that the tariff was to be
uniform, irrespective of distance, and was not to exceed 24 cents for
20 words, address not to be counted. It had said nothing on the subject
of the tariff to be charged to the newspaper press.

On May 15, 1868, Mr. Scudamore had written the Committee of the
newspaper proprietors: "As a matter of course the Post Office would
not undertake to collect news any more than it would undertake to
write letters for the public, but the news being collected, it could,
and I submit, ought, to transmit it at rates at least as low as those
now charged, and which though they are unquestionably low, are still
believed to yield the companies a considerable profit.... It seems to
me, indeed, that the transmission of news to the press throughout the
United Kingdom should be regarded as a matter of national importance
and that the charge of such transmission should include no greater
margin of profit than would suffice to make the service fairly
self-supporting."[102]

Thereupon the newspaper proprietors demanded: "That the maximum rate
for the transmission of telegraphic messages [for newspapers] should
not exceed that which is now paid by each individual proprietor [as a
subscriber to the companies' press bureau], which is, for transmission,
exclusive of the cost of collection, 4 cents per 100 words."[103] This
demand assumed that the companies' charge of 8 cents per 100 words was
remunerative; that it was made up of two separable parts: a charge for
transmission, and a charge for collecting and editing; and that the
charge ascribed to transmission still would remain remunerative even
after the charge ascribed to collecting and editing had been withdrawn.
Upon none of these several points were the officers of the telegraph
companies asked to testify, the statements of the newspaper proprietors
being allowed to stand unsupported.

[Sidenote: _Mr. Scudamore yields to the newspapers_]

In order to insure the payment of an average sum of 4 cents or 5 cents
per 100 words, the newspaper proprietors proposed that messages be
transmitted for the newspapers "at rates not exceeding 24 cents for
every 100 words transmitted at night, and at rates not exceeding 24
cents for every 75 words transmitted by day, to a single address, with
an additional charge of 4 cents for every 100 words, or for every 75
words, as the case may be, of the same telegram so transmitted to every
additional address." By way of compromise, Mr. Scudamore proposed a
charge of 24 cents for 75 words or 100 words for each separate town
to which each message might be sent, and the limitation of the 4 cent
copy rate to copies delivered by hand in the same town. Mr. Scudamore,
however, withdrew that proposal, and accepted the proposition of the
newspaper proprietors, which became the law. It is needless to add that
the opposition of the newspaper press to the Bill of 1868 would have
delayed the passage of that Bill even more than any opposition on the
part of the telegraph companies and railway companies could have done.
Indeed, it is probable, that the newspaper press could have defeated
the Bill.

In 1875 the Treasury appointed a "_Committee to investigate the Causes
of the Increased Cost of the Telegraphic Service since the Acquisition
of the Telegraphs by the State_." That committee consisted of three
prominent officers taken from the Post Office Department and other
departments of State. Upon the newspaper tariff fixed by the Act of
1868, the Committee reported: "The consequences of such a system must
be obvious to every one. Even at ordinary times the wires are always
largely occupied with press work, and at extraordinary times they
are absolutely flooded with this most unremunerative traffic, which
not only fills the wires unduly to the exclusion of better paying
matter, but necessitates a much larger staff than would be necessary
with a more reasonable system [of charges].[104] After very careful
consideration of these points, Mr. Weaver [one of the members of the
committee, and the former Secretary of the Electric and International
Telegraph Company], has no hesitation in expressing his opinion that
the principle of the stipulations of the tariff authorized by the
Telegraph Act, 1868, both as regards messages transmitted for the
public, and those forwarded for the press, is essentially unsound,
and has been the main cause of the large percentage of expenditure as
compared with the gross revenue. In order to provide for the prompt
and efficient transmission of the vast amount of matter produced
by such a system, a considerable extension of plant was necessary,
involving a large original cost, besides a regular yearly outlay for
maintenance and renewal, and not only so, but a large and constantly
increasing staff had to be provided to work lines, which, if taken
separately, would not be found to produce anything approaching to the
cost entailed for erecting, working, and maintaining them. It will be
obvious, therefore, that, unless a retrograde step be taken in order to
amend the principles upon which the stipulations of the tariff are made
up, it would be unreasonable to expect that the revenue derived for
telegraph messages under the present system can ever be made to cover
the expenses of working, the interest upon capital, and the ultimate
extinction of the debt."[105]

In May, 1876, Mr. C. H. B. Patey, Principal Clerk in the Post Office
Department, testified that the Post Office was losing $100,000 a
year by transmitting 220,000,000 words for the newspaper press at an
average price of 8 cents per 100 words. Mr. Patey said 180,000,000
words were being carried at the rate of 4 cents per 100 words, or
for $74,180 in the aggregate; and 40,000,000 were being transmitted
at the rate of 24 cents per 100 words, or, for $109,795 in the
aggregate.[106] Mr. Patey submitted no calculations in support of his
statement that there had been a loss of $100,000 on newspaper messages
yielding $183,975. But he cited two illustrations from Hull and the
Nottingham-Sheffield-Leeds-Bradford group of towns. He stated that
the Post Office received $1,600 a year for messages transmitted to
six newspapers in Hull, and spent $5,275 on the transmission of those
messages. He added that the service supplied to nineteen towns included
in the Nottingham-Sheffield-Leeds-Bradford group of towns yielded
$21,760, and cost the Post Office $38,270.[107]

In 1876, the Postmaster General, through Mr. S. A. Blackwood, Financial
Secretary to the Post Office,[108] asked the Select Committee on the
Post Office (Telegraph Department) to recommend to Parliament that the
tariff on newspaper press messages be made "24 cents for 75 words or
100 words for each separate town to which each message may be sent, and
that the 4 cent copy rate be limited to copies delivered by hand in
the same town." That, it will be remembered, was the proposal made and
withdrawn in 1868 by Mr. Scudamore. The Select Committee recommended
that the amount of the loss on the newspaper press messages be clearly
ascertained, and that the copy rates be raised sufficiently to cover
that loss. But Parliament failed to act on the recommendation.

Mr. Patey had supported Mr. Blackwood's request with the statement,
based upon inquiry of postmasters throughout the United Kingdom, that
"in a very large number of towns only a small part of the telegraphic
news transmitted was inserted in the newspapers. In many cases, on
inquiry of the proprietors, it was stated that it was not inserted
inasmuch as it was not of interest to the readers. In other cases,
because the amount of local news was more than would admit of the
special telegraphic news being inserted." Mr. Patey also had quoted
from a recent issue of the _Glasgow Herald_ the statement, that "there
was not a leading provincial paper in the Kingdom, the sub-editorial
room of which was not littered in the small hours of the morning ankle
deep with rejected telegraph flimsy;" and from a recent issue of the
_Freeman's Journal_: "The fact is, that the Post Office, and the
better class of papers as well, are both over-pressed with these cheap
duplicate telegrams. We suppose we pay for about ten times as many as
we print. Though we get them, and pay for them, so as to insure having
the best news from every quarter, we regard them rather as a nuisance,
and would be glad to have them reduced in quantity." And finally, Mr.
Patey had argued that the newspaper press was able to pay much more
than it did pay, "inasmuch as there had been a tendency on the part of
the papers generally, not confined only to the large papers," to get
their news by special messages prepared by their own agents and not
sent in duplicate to any extent.[109]

Before the _Select Committee on the Revenue Departments Estimates_,
1888, Mr. C. H. B. Patey, Third Secretary to the Post Office, stated:
"We believe that the tariff under which the press messages are sent in
this country causes a loss amounting to nearly $1,000,000 a year."[110]
In August, 1888, in the House of Commons, Mr. Cochrane-Baillie asked
the Postmaster General "whether in view of the _Report of the Committee
on the Revenue Departments Estimates_, he could state that the
Government would bring in further legislation to relieve the country
from the loss incurred by the present arrangement in connection with
press telegrams?" The Postmaster General replied that "he was quite in
accord with the Committee on Revenue Departments but he feared it would
be difficult to effect any change, since the newspaper press tariff was
fixed by the Act of 1868, and had been in force for upward of eighteen
years."[111]

[Sidenote: _Annual loss on Newspaper Messages estimated at $1,500,000_]

In November, 1893, Mr. Arnold Morley, Postmaster General, stated in
the House of Commons that "the best estimate that can be formed by the
officials at the Post Office points to the loss on the newspaper press
telegrams being at least $1,500,000 a year; and it probably is still
more."[112] In April, 1895, Mr. Arnold Morley, Postmaster General,
repeated the foregoing statement, and "maintained it in spite of
various statements to the contrary in the newspapers." He added: "and I
should be quite willing to arrange for an impartial investigation such
as is suggested by the Right Honorable Gentleman, if I were to receive
satisfactory assurances that the press would abide by the result of an
inquiry, and would undertake not to oppose the passage of the necessary
legislation for a corresponding revision in the charges, if it should
be shown that they are insufficient to provide for the cost of the
service."[113] The assurances were not forthcoming; and the newspaper
press tariff remained unchanged.

In April, 1900, Mr. R. W. Hanbury, Financial Secretary to the
Treasury, and representative in the House of Commons of the Postmaster
General, a member of the House of Lords, said: "The penny postage
realizes an enormous revenue and brings in a profit, but every other
part of the Post Office work is carried on at a loss. The whole profit
is on the penny letter."[114]

* * * * *

[Sidenote: _Betting on Horse Races subsidized_]

The Telegraph Act of 1868 provided that newspaper rates should be given
to "the proprietor or occupier of any news room, club, or exchange
room."[115] The clubs or exchange rooms in question are largely what
we should term "pool-rooms," places maintained for the purpose of
affording the public facilities for betting on horse races.[116] In
1876 Mr. Saunders, proprietor of the Central News Press Association,
testified that his association would send in the course of a day to the
same list of addressees the results of a number of races.

The words in the several messages might not aggregate 75 words, and
thus his association would be charged for the transmission of one
message only. In that way a number of messages would be transmitted
"gratuitously." Mr. Saunders added that, in 1875, the Post Office
had transmitted gratuitously for his association 446,000 sporting
messages. Mr. Patey, Third Clerk in the Post Office, added that while
the Post Office received 4 cents for transmitting from 8 to 10 sporting
messages, it had to make 8 to 10 separate deliveries, by messenger boy,
on account of those messages which were counted as one; and that each
such delivery cost the Post Office on an average two cents. Thus, on a
recent date, the Post Office had delivered the results of the Lichfield
races to 205 addressees by means of 1,640 separate deliveries, and had
received for the service, on an average, one-half a cent per separate
message.[117]

In January, 1876, the Post Office discontinued the "continuous
counting" of sporting messages.[118] It took the Department six years
to summon the courage to make this change whereby was effected some
diminution of the burden cast upon the general body of taxpayers for
the benefit of the sporting element among the voters of the United
Kingdom.

It would seem, however, that the practice of "continuous counting"
had been resumed at some subsequent date. For, in March, 1906, in
reply to a question from Mr. Sloan, M. P., the Postmaster General, Mr.
Sydney Buxton, said: "Clubs are, under section 16 of the Telegraph
Act of 1868, entitled to the benefit of the very low telegraph rates
accorded to press messages; and I have no power to discriminate against
a legitimate club because it is used for betting purposes. I propose
to consider whether the section ought not to be amended in certain
respects."[119]

On December 31, 1875, the Post Office discontinued entirely the
practice--voluntarily assumed--of transmitting sporting messages to
so-called hotels, in reality saloons. The waste of the public funds
that the Post Office had incurred in response to pressure from the
publicans, is illustrated in Mr. Patey's statement that the Post Office
had received from a certain Liverpool hotel $0.82 a week for messages
which had entailed a weekly expenditure of $2.50 for messenger service
alone.

FOOTNOTES:

[98] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876, J. E. Taylor, Proprietor of the _Manchester
Guardian_; q. 3,835 to 3,849, and 1,246; and C. H. B. Patey, Principal
Clerk in the Post Office Department; q. 3,452 and following, 3,845,
3,377, and 3,383; and _Report by Mr. Scudamore on the Re-organization
of the Telegraph System of the United Kingdom_, 1871, pp. 31 and 32.

[99] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; Dr. Cameron, Editor and Manager of the _North
British Daily Mail_; q. 1,430 and following.

[100] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876, C. H. B. Patey, Principal Clerk in the Post Office
Department; q. 4,900 and 4,901.

[101] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; J. E. Taylor, Proprietor of the _Manchester
Guardian_; Wm. Saunders, Proprietor of the _Western Morning News_;
Dr. Cameron, Proprietor of the _North British Daily Mail_; and F. D.
Finlay, Proprietor of the _Northern Whig_.

[102] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; J. E. Taylor, Proprietor of the _Manchester
Guardian_; q. 3,854 to 3,862.

[103] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; G. Harper, Editor _Huddersfield Chronicle_, and
representative of the Provincial Newspaper Society, which embraced
about 300 newspapers.

[104] Compare: _Report by Mr. Scudamore on the Re-organization of the
Telegraph System of the United Kingdom_, 1871, pp. 31 and 32.

Daily number of words transmitted for the newspapers:

Parliament Parliament
in session not in session
1868 6,000 4,000
1870 20,000 15,000

[105] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; J. E. Taylor, Proprietor of the _Manchester
Guardian_; q. 3,854 and 3,900; and G. Harper, Editor _Huddersfield
Daily Chronicle_, and Representative of the Provincial Newspaper
Society; q. 4,157 to 4,162.

[106] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 5,057 to 5,074, 3,360, 3,377, 3,383, and 4,934
to 4,942; and Jno. Lovell, Manager of The Press Association; q. 3,979
to 3,986.

[107] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 5,122 to 5,129.

[108] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 5,278.

[109] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 3,385 and following, 4,926, 4,927, 3,371, and
3,372.

Receipts from messages sent to individual newspapers, and not
duplicated to any extent:

$
1870 29,000
1871 41,000
1872 60,000
1873 78,000
1874 85,000
1875 91,000

[110] Questions 2,007 and 2,167.

[111] _Hansard's Parliamentary Debates_, August 30, 1888, p. 305.

[112] _Hansard's Parliamentary Debates_, November 27, 1893, p. 1,789.
Compare also June 19, 1893, p. 1,316.

[113] _Hansard's Parliamentary Debates_, April 4, 1895, p. 919.

[114] _Hansard's Parliamentary Debates_, April 27, 1900, p. 136.

[115] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 3,360 to 3,370, 3,423, 4,917 to 4,923, and 5,147
to 5,149.

[116] _Report by Mr. Scudamore on the Re-organization of the Telegraph
System of the United Kingdom_, 1871, pp. 31 and 32; and _Report from
the Select Committee on Revenue Departments Estimates_, 1888; Mr. C. H.
B. Patey, Third Secretary to the Post Office, in Appendix No. 14.

=======+=======+========+============+===========+=============
| | News- | Newsrooms | Messages | Words
| Towns | papers | and Clubs | Delivered | Delivered
| | |(pool-rooms)| |
-------+-------+--------+------------+-----------+-------------
1869 | 144 | 173 | 133 | ? | ?
1871 | 365 | 467 | 639 | ? | 21,702,000
1881 | 326 | 525 | 278 | 2,735,042 | 327,707,400
1885 | 371 | 578 | 397 | 3,616,653 | 421,362,579
1887 | 286 | 499 | 289 | 4,289,986 | 481,796,400
=======+=======+========+============+===========+=============

[117] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 4,047 to 4,051, 4,889, 4,890 and 3,343.

[118] _Parliamentary Paper_, No. 196, Session of 1877; Copy _of
the Regulations Relating to Press Telegraph Messages issued by the
Postmaster General_ in 1876.

[119] _Hansard's Parliamentary Debates_, March 12, 1906, p. 867.

CHAPTER IX

THE POST OFFICE EMPLOYEES PRESS THE HOUSE OF COMMONS FOR INCREASES OF
WAGES AND SALARIES

At the time of the transfer of the telegraphs to the State, February,
1870, the average weekly wages paid by the telegraph companies to the
telegraphists in the seven largest cities of the United Kingdom,
was $5.14 for the male staff, and $3.56 for the female staff. That
average for the male staff includes the salaries of the supervisors;
if the latter be excluded, the average for the rank and file of the
male employees will fall to $4.80.[120] In 1872, two years after the
transfer, the average wage of the male telegraphists in the offices of
Metropolitan London was $6.56, while the average wage of the female
clerks was $4.30. For the United Kingdom exclusive of London, the
average wage of the telegraphists was $5.46 for the male employees,
and $4.50 for the female employees.[121] The latter averages record a
larger increase of wages in the period 1870 to 1872, than would appear
at first blush upon comparison with the average of 1870, namely: $4.80
for men telegraphists and $3.56 for women telegraphists. For while
the figures for 1872 record the averages for the whole United Kingdom
exclusive of London, those for 1870 record the averages of the seven
largest cities only.

The increases in wages and salaries in the years 1870 to 1872 were due
mainly to the all round rise in wages and salaries that occurred in
the United Kingdom in the period from 1868 to 1872. In the case of the
telegraphists the rise in wages was postponed until 1870 to 1872, for
the reason that the telegraph companies, as much as possible, adhered
to the past scale of wages and salaries on account of the pending
transfer of their properties to the State.[122] The companies were
able to pursue the policy in question by refraining from increasing
their forces materially, working their old staff over-time. In part,
however, the increase in the wages of the telegraphists after the
transfer of the telegraphs to the Post Office was due to the fact
that the Government was obliged to pay the employees in the Telegraph
Department something more than the rates of wages prevailing in the
open market. For, previous to the acquisition of the telegraphs,
the Government had established the policy of paying its employees
more than the open market rate for work requiring only fidelity and
diligence in the performances of routine duty, as distinguished from
work requiring a high order of intelligence and discretion. Shortly
after the Post Office had acquired the telegraphs, it was compelled to
extend the aforesaid policy to the new body of State employees. As a
matter of everyday politics, it proved impossible for the Government to
discriminate between the several classes of public servants, paying one
part of them "fancy" wages, and the rest of them wages determined by
demand and supply.[123]

An episode from the reorganization of the Civil Service in 1876,
in accordance with the recommendation of the so-called Playfair
Commission, affords insight into the British practice of paying the
public servants something more than the market rate of wages and
salaries. The Playfair Commission had recommended that the pay of
the lower division of Government clerks begin with $325, and rise by
annual increments to $1,000, for seven hours' work a day. Thereupon the
Government had fixed the rate at $400, to rise by annual increments to
$1,000. The Playfair Commission had stated that if it had been guided
by the "voluminous" evidence which it had taken, it would have fixed
at $750, the maximum to which should rise the salaries of the lower
division clerks. But it had desired to attract "the elite" of the
classes that the Government could draw from, and therefore it had fixed
the maximum at $1,000.[124]

* * * * *

[Sidenote: _Fawcett Revision of Wages, 1881_]

In August, 1881, the House of Commons accepted the proposal of Mr.
Fawcett, Postmaster General, to increase the pay of the telegraph
operators, to count seven hours of night attendance a day's work,
and to grant various other minor concessions.[125] Those several
changes raised the average sum spent for salaries and wages in the
transmission of a telegraphic message, from 11.70 cents in 1880-81,
to 13.72 cents in 1884-85.[126] Mr. Fawcett stated in the House of
Commons that inquiry of "leading employees of labor, such as bankers,
railway companies, manufacturers, and others" had led him to conclude
that the telegraph operators were underpaid. He also mentioned the fact
that while he was considering the arguments that the telegraphists
had made before him in support of the proposition that their pay was
inadequate, "outside influence" was brought to bear repeatedly upon
the telegraphists, and that the aforesaid outside influence "went so
far as to recommend the employees to resort to the last extremity of a
strike."[127]

Mr. MacIver replied that "he wished to say a word with regard to
the imputation contained in the statement of the Right Honorable
Gentleman, that he [Mr. MacIver] had exercised outside influence upon
the telegraphists. In common with other members of the House, he had
heard[128] the complaints of the telegraphists, and had thought it
his duty to bring complaints before the House and the Right Honorable
Gentleman, the Postmaster General, so that, if he had erred, he had
erred in common with many others."

[Sidenote: _The Treasury on Civil Service Pressure_]

In the course of the debate in the House of Commons, Lord Frederick
Cavendish, Financial Secretary to the Treasury, said: "With respect
to the telegraph clerks, since they had received the franchise,
they had used it to apply pressure to Members of Parliament for the
furtherance of their own objects.... If, instead of the Executive being
responsible, Members of the House were to conduct the administration
of the departments, there would be an end of all responsibility
whatever. In the same way, if the Treasury was not to have control over
expenditure, and Members of the House were to become promoters of it,
the system [of administering the national finances] which had worked
so admirably in the past would be at an end.... With regard to the
position of the telegraphists in the Government Service as compared
with their former position under private companies, what had taken
place would be a warning to the Government to be careful against unduly
extending the sphere of their operations by entering every day upon
some new field, and placing themselves at a disadvantage by undertaking
the work of private persons. He pointed out that the Government Service
was always more highly paid than that of the companies and private
persons, and in the particular case of the telegraph clerks [operators]
the men themselves received higher pay than they had before."[129]

Before the Postmaster General had introduced into Parliament his scheme
for improving the positions of the telegraphists, sorting clerks and
postmen,[130] Lord Frederick Cavendish, in his position as Financial
Secretary of the Treasury,[131] had written the Postmaster General
as follows: ... "Admitting, as my Lords [of the Treasury] do, that
when discontent is shown to prevail extensively in any branch of the
Public Service, it calls for attention and inquiry, and, so far as
it is proved to be well founded, for redress, they are not prepared
to acquiesce in any organized agitation which openly seeks to bring
its extensive voting power to bear on the House of Commons against
the Executive Government responsible for conducting in detail the
administration of the country. The persons who are affected by the
change now proposed are, as you observe, no fewer than 10,000, and the
entire postal service numbers nearly five times as many. Other branches
of the Civil Service employed and voting in various parts of the United
Kingdom, are at least as numerous in the aggregate as the servants
of the Post Office. All this vast number of persons, not living like
soldiers and sailors outside ordinary civil life are individually and
collectively interested in using their votes to increase, in their
own favor, the public expenditure, which the rest of the community,
who have to gain their living in the unrestricted competition of the
open market, must provide by taxation, if it is provided at all. My
Lords therefore reserve to themselves the power of directing that the
execution of the terms agreed to in the preceding part of the letter be
suspended in any post office of which the members are henceforth known
to be taking part in extra-official agitation. They understand that you
are inquiring whether the law, as declared in the existing Post Office
Acts, does not afford to the public similar protection in respect of
postal communication, including telegraphs, as is afforded by the Act
38 and 39 Victoria, c. 86, s. 4, to municipal authorities and other
contractors, against breaches of contracts of service in respect of
gas or water, the wilful interruption to the use of which [by means
of a strike] is hardly of more serious import to the local community
than is that of postal communications to the national community. If
the existing Post Office Acts do not meet this case, it will be for my
Lords to consider whether the circumstances continue to be such as to
make it their duty to propose to Parliament an extension to the Post
Office of provisions similar to those cited above from the Act 38 and
39 Victoria, c. 86, s. 4."[132]

In June, 1882, Mr. Fawcett, Postmaster General, said in the House of
Commons: "The House would remember how, last session, he was pressed
by honorable Members on both sides of the House to increase the pay
of the telegraph employees ... in spite of all that was done for the
telegraph employees, he noticed that they were constantly saying that
what they received was worse than nothing. All he could say was that
if $400,000[133] a year out of public funds was worse than nothing,
he, for one, deeply regretted that that sacrifice of public money was
ever made."[134] In March, 1883, Mr. Fawcett, Postmaster General,
said: "The salaries of the telegraph employees have--I will not say
by the pressure of the House, but certainly with the approval of the
House--been increased [in 1881]. I do not regret that increase; I think
the extra pay they receive was due to them, and if I had not thought
so, no number of memorials would have induced me to recommend the
Treasury to make such a large sacrifice of revenue."[135] In April,
1884, Mr. Fawcett, Postmaster General, said: "$750,000 a year has
been spent [of late] in improving the position of the telegraphists
and letter sorters, and I say there never was an expenditure of
public money which was more justifiable than that. If we had yielded
to mere popular demands and thrown away the money we should deserve
the severest censure; but I believe that if an increase of wages had
not been conceded, it would have been impossible to carry on the
administration of the Department; and I think there is no economy so
unwise as refusing to increase remuneration when you are convinced that
the circumstances of the case demand the increase."[136]

In July, 1888, the following questions and answers passed between the
Chairman of the Select Committee on Revenue Departments Estimates, and
Sir S. A. Blackwood, Secretary to the Post Office. "With respect to
the increase of salaries at the time when Mr. Fawcett was Postmaster
General, I presume that those recommendations of his were founded upon
recommendations addressed to him by the [permanent officers of the]
Department?" "I can hardly say that they were. Mr. Fawcett held very
strong views himself as to the propriety of making an increase to the
pay of the lower ranks of the Department, and he carried out that
arrangement." "But the Department, I take for granted, was not excluded
from expressing an opinion upon the subject?" "Certainly not. I became
Secretary at the time [1880] when Mr. Fawcett became Postmaster
General.[137] I never should have initiated such a movement, but I saw
great force in many of the reasons which Mr. Fawcett urged in favor of
such an increase; and, at any rate, the Department, as represented by
me, saw no reason to raise a serious opposition, if it were at liberty
to do so, to the Postmaster General's views and determinations."[138]

Before the Tweedmouth Committee, 1897, Mr. E. B. L. Hill, "practically
commander-in-chief of the provincial postmen," testified as follows
upon that part of the Fawcett revision of 1882 that applied to the
postal service proper. He said that previous to 1882 all the revisions
of the wages of the postmen had been made on the basis of demand
and supply; but that the Fawcett revision had departed from that
policy.[139]

* * * * *

[Sidenote: _Evidence, in 1888, as to Civil Service Pressure_]

The Royal Commission on Civil Establishments, 1888, took up at some
length, the question of the pressure brought by the civil servants upon
the House of Commons for increases of wages and salaries. Before that
Commission, Sir Reginald E. Welby, who had entered the Treasury in
1856, had become Assistant Financial Secretary in 1880, and had been
made Permanent Secretary to the Treasury in 1885, testified that many
Members of the House of Commons had recently attended meetings of the
civil servants for the purpose of endorsing the claims of the civil
servants for increases of pay; and that they had taken that action
without having made a close examination of the grounds upon which the
civil servants had put forward their claims. He added: "It is utterly
impossible for us [the Treasury] to ignore these symptoms that make it
very difficult to keep within reasonable bounds the remuneration of
such a body." Thereupon one of the members of the Royal Commission said
to Sir R. Welby: ... "but are you not aware that there is a general
feeling throughout the country among the people who are employed by
private individuals and public bodies [other than the State], that
Government servants receive higher pay than they do, and that when
these persons are called upon to exercise the franchise they bring
pressure to bear upon their Members just the other way [_i. e._,
against the increase of government wages and salaries]?" Sir R. Welby
replied: "Of course, I have no means of testing that. I am very glad to
hear that Parliamentary influence is not all in one direction. We do
not see the proof of it at the Treasury."[140]

Sir Algernon E. West, Chairman Inland Revenue Commissioners,[141] said
he wished for a greater spirit of economy, "not in the offices so much
as outside."

Thereupon the Chairman of the Royal Commission said: "I do not quite
understand what you mean by outside." Sir Algernon E. West replied: "I
say it with all possible deference, particularly Parliament." To the
further query: "Has there been on the part of Members of Parliament, an
increase of intervention on behalf either of the individual officers of
the Inland Revenue or on behalf of classes of the Inland Revenue since
the enfranchisement in 1869?" Sir A. West replied: "A large increase
on behalf of classes, not of individuals.... I should like to add ...
that I think last year the Lower Division clerks succeeded in getting
two hundred Members of Parliament to attend a meeting which was held to
protest against their grievances."[142]

Sir Lyon Playfair, who had been Chairman of the Royal Commission
on the Civil Service, 1874 to 1876, and the author of the Playfair
Reorganization of the Civil Service, 1876, testified as follows before
the Royal Commission of 1888. "Unfortunately Members of Parliament
yield to pressure a great deal too much in that direction, and they are
certainly pressing the Exchequer to increase the wages and salaries of
the employees of the Crown.... In a private establishment a man looks
after his own interests, and if a person came to him and said: 'Now you
must increase the salaries of these men by $100 or $250 all round,'
he would say: 'You are an impertinent man, you have no business to
interfere,' but you cannot say that to Members of Parliament, and
there is continual pressure from Members of Parliament to augment the
salaries of the civil servants."[143]

* * * * *

[Sidenote: _Raikes Revision of 1890-91_]

With the increase of the number of telegraphic messages transmitted,
from 33,278,000 in 1884-85, to 62,403,000 in 1889-90, the average sum
spent on wages and salaries per message transmitted, fell from 13.72
cents in 1884-85, to 10.62 cents in 1889-90. In the following year,
1890-91, Mr. Raikes, Postmaster General, inaugurated an extensive
scheme of increases in wages, reductions in the hours of work, and
other "improvements in the condition" of the telegraph employees, that
again raised to 12.28 cents per message in 1894-95, the average sum
spent on wages and salaries. Mr. Raikes, Postmaster General, raised the
wages of the supervising staff, as well as the wages of the rank and
file;[144] he granted payment at one and one-quarter rates for over
time, granted payment at double rates for all work done on Sunday,
gave extra pay for work done on Bank Holidays, and increased from half
pay to full pay the sick-leave allowance. The annual cost of those
concessions Mr. Raikes estimated at $500,000 a year. The cost of the
concessions granted at the same time to the employees in the postal
branch of the Post Office Department, he estimated at $535,000 a
year.[145]

Mr. Raikes' schemes were based largely upon the _Report of Committee
of the Indoor Staff_. That Report has not been published; but in 1896,
Mr. Lewin Hill, Assistant Secretary General Post Office, London, stated
before the so-called Tweedmouth Committee,[146] that the majority
of the committee on the Indoor Staff had signed the Report because
they believed that if the concessions recommended in the Report were
granted, "that would be the end of all agitation." Mr. Hill added: "I
remember myself saying [to the Committee] whatever else happens, that
will not happen. Do not delude yourselves with the notion that the
men will cease to ask." He continued: "Mr. Raikes' improvements were
received with the greatest gratitude, and there were any number of
letters of thanks from the staff; but the ink was scarcely dry when the
demands began again, and they have been going on ever since, and will
go on.... There is, unfortunately, a growing habit among the main body
of Post Office servants to use their voting power at elections to get
higher pay for themselves, and it is well known that in constituencies
in which political parties are at all evenly balanced, the Post Office
servants can turn the election."

[Sidenote: _Earl Compton demands a Select Committee_]

The Committee on the Indoor Staff appointed by Mr. Raikes in March,
1890, had not had the approval of the rank and file of the civil
servants, nor had it had the approval of the representatives of
the civil servants in the House of Commons, on the ground that it
consisted of government officials, who were not responsible directly
to the voters. Therefore one of the leading representatives in the
House of Commons of the Post Office employees, Earl Compton,[147]
on April 15, 1890, had moved: "That, in the opinion of the House,
the present position of the telegraphists in London and elsewhere is
unsatisfactory, and their just grievances require redress."[148] In
the course of his argument, Earl Compton said: "Perhaps the Right
Honorable Gentleman [the Postmaster General] has been cramped [in
the administration of his department] by what is called officialism.
In that case, if the present motion is passed, the Right Honorable
Gentleman's hands will be strengthened [against his permanent
officials], and he will be able to redress the grievances which have
been brought under his attention."

Baron F. de Rothschild followed Earl Compton, with the statement: "The
Postmaster General may well say it is no business of ours to interfere
between the civil servants and himself, but here I would venture to
ask him whether the civil servants are not quite as much our [_i. e._,
the public's] servants as they are those of the Postmaster General?"
Baron de Rothschild went on to say that through an error made in the
course of the transmission of a telegram his betting agent had placed
his money on the wrong horse, causing him to lose a considerable sum of
money. Such mistakes would not occur if the telegraphists were better
paid.

Sir A. Borthwick regretted "the increasing tendency to invoke the
direct interposition of Parliament between the Executive Government and
the Civil Service."

The Postmaster General concluded his statement with the words: "I hope
that after the statement which I have been able to make, the House
will recognize the claim of every Government that the House shall
not interfere with matters of Departmental administration, except
where it thinks fit to censure the Minister in charge. So long as a
Minister occupies his position at the head of a department, he ought
to be allowed to occupy it in his own way. I venture to hope that the
House will leave questions of this sort in the hands of those who
are directly and primarily responsible for them, in the belief that
grievances of the servants of any department are not likely to lack
careful consideration, and, I believe, just and fair treatment."

A few months later, the Postmaster General made this statement in
the House of Commons: "I wish to correct one misapprehension. It is
supposed that the position of the Government is that only the market
value should be paid for labor of this sort [the nonestablished
post office servants]. Those who sat in the Committee [of Supply]
will remember that I laid down a different doctrine the other day.
My own view is, that while the market value must be the governing
consideration, because we are not dealing with our own money, but with
the money of the taxpayers, the taxpayers would wish that, in applying
that standard to those in the Public Service, we should always bear in
mind that a great Government should treat its employees liberally."[149]

* * * * *

Earl Compton failed to carry his motion in 1890; and in the following
year he made another unsuccessful attempt, moving: "That, in the
opinion of this House, it is desirable that a Select Committee be
appointed to inquire into the Administration of the Post Office."[150]

Mr. Ambrose, speaking against the motion, said: "Questions between
capital and labor and between the Government and its employees should
not be influenced by motions in the House. We are all subjected as
Members of this House to all manner of whips from employees of the
Civil Service and the Post Office, and I know that when the _status_
of the Civil Service clerks was being settled some time ago, there
was, among Members generally, a feeling of disgust at the telegrams
and letters being received almost very minute from people seeking to
influence our votes on some particular question of interest to them."

Mr. Raikes, Postmaster General, enumerated in detail the concessions
made to the telegraphists and letter sorters in 1890 and 1891, at a
cost of $1,035,000 a year, and added: "and to all this, not one single
reference has escaped those who have spoken." He concluded with the
words: "It would never do if, in order to encourage the vaporings of
three or four of those gutter journals which disfigure the Metropolitan
Press, Members of this House were to make the grave mistake of throwing
discredit upon a body of men like the permanent officials [Executive
Officers] of the Post Office, of whom any country might be proud,
with whom, I believe, any Minister would be delighted to work, and of
diminishing the authority in his own Department of a Minister, who,
whatever may be his personal deficiencies, at heart believes that he
has done nothing to forfeit the confidence of this House."

A few months later, when the House was considering the Estimates of
the Post Office Department, the Postmaster General said: "Economists
[advocates of economy] of former days would have been interested and
surprised by the general tenor of the debate to which we have just
listened. The great point used to be, as I understand, to show a
large balance of revenue to the State [from the Post Office], and to
make a defense against charges of extravagance in the past. But we
have now arrived at a time when the opposite course is to be taken,
and the only chance a Minister has of enjoying the confidence of
this House is to point to a diminished balance of revenue and to a
greater expenditure on the part of the department." ... In 1891-92 our
telegraph expenditure will increase by $3,000,000, while our revenue
will increase by $1,700,000; "the reason is to be found in the very
comprehensive measures framed in the course of the last year for the
improvement of the position of the staff."[151]

[Sidenote: _Civil Servants circularize Members of Parliament_]

Mr. Raikes died in August, 1891; and in June, 1892, Sir James
Fergusson, his successor, asked the House of Commons to permit him to
call attention to a circular addressed to Candidates at the [impending]
General Election, and also sent to Members of the [present] House.
The circular had been issued by "The Provincial Postal Telegraph Male
Clerks" to "Candidates at the General Election," and contained the
following statement: "We have, in addition, to ask you whether you
will, if elected, vote for the appointment of a Parliamentary Committee
to inquire into the working of the Telegraph Service, as we believe
such an investigation would be of great utility, and could not but tend
to the improvement of the service, the state of which is causing great
public dissatisfaction, as will be seen from the subjoined newspaper
extracts. In conclusion, we beg to state that we await your reply to
these few questions of vital importance with considerable anxiety, and
trust that you will give them your careful consideration."

Sir James Fergusson added that another branch of the Post Office
servants was issuing similar circulars.[152]

He said, "I think that there would be an end to the discipline which
should characterize members of the Public Service if encouragement
were given to such attempts to bring pressure to bear on Members of
the House and Candidates on the eve of a General Election.... I have
to say that the leading Members of the Opposition, including the right
honorable Member for Midlothian [Mr. W. E. Gladstone], and the right
honorable Member for Derby [Sir Wm. Harcourt], fully concur in the
observations I have made."[153]

A few days later, the Postmaster General issued the following notice:
"The Postmaster General at the same time warns Post Office servants
that it would be improper for them, in combination or individually, to
endeavor to extract promises from any candidate for election to the
House of Commons with reference to their pay or duties."

In the House of Commons Sir James Fergusson defended this notice
in these words: "I in no way deny the right of Members of the
Public Service to appeal to Members of this House to get their case
represented here, but there is all the difference between Members being
asked to represent a _prima facie_ case, and candidates being asked to
pledge themselves upon an ex-parte statement to support a revision [of
wages and salaries] or a commission of inquiry--in fact, to prejudge
the case. To ask for such a promise as a condition of giving a vote
does seem to me inconsistent with the duties of a public servant, and
to go beyond his constitutional privileges. In that view the warning
has been issued. By what law or right has this been done, the honorable
Member asks? By the right and duty which belongs to the head of a
Department to preserve proper discipline."[154]

In August, 1892, the Salisbury Government was succeeded by the
Gladstone Government, and Mr. Arnold Morley became Postmaster General.
On August 28, 1893, Mr. W. E. Gladstone, First Lord of the Treasury, in
reply to a question from Mr. Macdonald, said: "Questions may be raised,
on which I have no judgment to give on the part of the Government, as
to how far, for example, it is desirable for the public functionaries
to make use of their position as voters for the purpose of obtaining
from candidates promises or engagements tending directly to the
advantage of public servants in respect of pay and promotion. These are
matters which we deem not undeserving of consideration; but still they
do not form the subject of any decision on the part of Her Majesty's
Government in the nature of a restraint."[155] In accordance with the
policy thus announced, the Gladstone Ministry rescinded Sir James
Fergusson's order of June 17, 1892.[156]

[Sidenote: _Mr. Macdonald demands a Select Committee_]

In September, 1893, while the House was in Committee of Supply, Mr.
Macdonald[157] moved "a reduction of $500 in respect of the Salary
of the Postmaster General", in order to bring before the committee
the demand of the Post Office employees for "an independent inquiry
by a Parliamentary Committee." He stated "that in 1891 the present
Postmaster General [Mr. Arnold Morley] voted in favor of an inquiry
such as that for which he [Mr. Macdonald] now asked, and he wished
to know whether anything had occurred to cause the Right Honorable
Gentleman to change his view since that time."[158]

The Postmaster General, Mr. Morley, replied: "He was asked how he
could account for his vote in 1891 when he had supported the Motion of
the noble Earl, the Member for Barnsley [Earl Compton]? He accounted
for it on two grounds: He had supported the proposal, which was an
unprecedented one, because there was an unprecedented condition of
discontent prevailing throughout the Postal and Telegraph Service--or,
he confessed, he was under that impression at the time. The condition
of things in various branches of the Service was serious. There had
been an _émeute_ in the Savings Bank Department, and whether with
reason or without reason, the whole of the Services were discontented
with their position. The condition of things at present, however, did
not bear out the idea that there was anything like general discontent
prevailing. He accounted for his action on another ground. Since 1891
large concessions had been made, with enormous additional expense to
the country, and that made the state of things very different to what
it was when he supported the noble Earl's Motion."

Earl Compton said: "He had several times in past years stood up and
spoken for the telegraph clerks, and as the Amendment before the
committee related practically to them, it would be dishonest and mean
on his part, if, having taken a strong course [while sitting] in
opposition, he did not take the same course now his friends were in
power."

Mr. Macdonald's Motion was lost.

[Sidenote: _Mr. Kearley demands a Select Committee_]

In May, 1895, Mr. Kearley[159] moved: "That in the opinion of this
House, it is highly desirable that the terms and conditions of
employment in the Post Office should be made the subject of competent
and immediate inquiry, with a view to the removal of any reasonable
cause of complaint which may be found to exist."[160] The Motion was
seconded by Sir Albert K. Rollit.[161] Mr. Kearley stated at the
outset, that his remarks would be directed to the advisability of
granting some inquiry. He was not in a position to assert that any
particular alleged grievance really existed as stated by the employees;
but there could be no doubt that there was general discontent. Mr.
Kearley next stated that the most serious grievance alleged by the
Post Office employees was inadequacy of pay arising from stagnation of
promotion. It was true that at the time the blocking extended only to
the more highly paid portions of the rank and file, but it must soon
extend to the general body of employees unless relief were afforded.
In 1880, and in 1890, Parliament had sanctioned respectively the
Fawcett revision of wages, and the Raikes revision, for the purpose of
correcting inadequacies of pay arising from stagnation of promotion.
The employees now demanded the abolition of the classes into which were
divided the various grades of the rank and file of the Post Office
employees; they demanded assured promotion to a definite maximum wage
or salary.

That demand rested on the assumption that the employees had a
vested right to the rate of promotion that had obtained under the
extraordinary increase of telegraphic business that had followed the
transfer of the telegraphs to the State in 1870, and had followed the
adoption of the 12 cent tariff in October, 1885.[162]

Mr. Kearley supported his argument by reference to the telegraphists,
who enter the service between the ages of fourteen and eighteen, as
second class telegraphists, and in the course of fourteen years rise
by annual increments from the wage of $3 a week to $10 a week. At the
latter wage they remain, unless they are promoted to be first class
telegraphists, whose wages rise by annual increments, from $10 a week
to $14 a week--payment for over-time, and so forth, being excluded in
all cases. Mr. Kearley argued that promotion from the second class to
the first class was blocked, stating that in Birmingham, in the last
4-3/4 years, only 11 men in 168 had been promoted from second class
telegraphists to first class telegraphists; and that in Belfast and
Edinburgh the annual rate of promotion had been respectively 1.14 per
cent. and 2 per cent. Those instances, said the speaker, were typical
of the larger cities; the conditions in the smaller cities and in the
towns being still worse.

Mr. Arnold Morley, Postmaster General, replied to this part of Mr.
Kearley's argument with the statement that there were in London and in
the Provinces 3,308 second class male telegraphists, and that out of
that number only 65 were both eligible for promotion and in receipt of
the maximum wage of the second class, namely $10 a week. He added that
the average wage of the men telegraphists who had been promoted from
the second class to the first in 1894 had been $8.46. That meant that,
on an average, the men in question had been promoted three years before
they had reached the maximum wage of the second class. The Postmaster
General characterized as "extraordinarily misleading" the source from
which Mr. Kearley had taken his statements of fact, namely, a table in
a pamphlet issued by the telegraphists in support of their contention
that promotion was blocked. The compilers of the table had left out
promotions "due to causes other than what were termed ordinary causes,
namely promotions due to appointments to postmasterships and chief
clerkships, to transfers from provincial offices to the central office
in London, and to reductions of officers on account of misconduct."
Thus at Birmingham there had been, not 11 promotions, but 16; at
Liverpool, not 8, but 37; at Belfast, not 4, but 14; at Newcastle, not
5, but 24; at Bristol, not 6, but 13; at Southampton, not 2, but 8.

The second alleged grievance brought forward by Mr. Kearley related to
the so-called auxiliary staff, which consisted of men who supplemented
their earnings in private employment by working for the Post Office
in the mail branch. It was stated that the Post Office was paying the
auxiliary staff from $3.75 to $4.00 a week, whereas it should pay at
least $6.00 a week. The third grievance related to the so-called split
duties, which involved in the course of the 24 hours of the day more
than one attendance at the office. The abolition of those duties was
demanded. The fourth grievance was that some of the younger employees
were obliged to take their annual three weeks' vacation [on full pay]
in the months of November to February.

Sir Albert Rollit,[163] in seconding the motion, termed "reasonable"
the demand of the telegraphists that the wages of the London
telegraphists should rise automatically to $1,150 a year; and those of
the provincial telegraphists to $1,000 a year. At the time the maximum
wage attainable in London was $950, while the maximum attainable
in the provinces was $800. Sir Albert Rollit added that the recent
order of the Post Office that first class telegraphists must pass
certain technical examinations or forego further promotion and further
increments in pay, "amounted almost to tyranny," and he further
reflected that "where law ended, tyranny began." Sir Albert Rollit,
an eminent merchant and capitalist, contended that when the existing
body of telegraphists had entered the service, no knowledge of the
technics of telegraphy had been required, and that therefore it would
be a breach of contract to require the present staff to acquire such
knowledge unless it were specifically paid for going to the trouble of
acquiring such knowledge. That contention of Sir Albert Rollit was but
one of many instances of the extraordinary doctrine of "vested rights"
developed by the British Civil Service, and recognized by the British
Government, namely, that the State may make no changes in the terms and
conditions of employment, unless it shall indemnify by money payments
the persons affected by the changes. If the State shall be unwilling to
make such indemnification, the changes in the terms and conditions of
employment must be made to apply only to persons who shall enter the
service in the future; they may not be made to apply to those already
in the service. This doctrine is supported in the House of Commons by
eminent merchants, manufacturers and capitalists. Sir Albert K. Rollit,
for instance, is a steamship owner at Hull, Newcastle and London; a
Director of the National Telephone Company, and he has held for six
years and five years respectively the positions of President of the
Associated Chambers of Commerce of the United Kingdom and President of
the London Chamber of Commerce.

When Sir Albert Rollit argued that the Government had broken faith
with the telegraphers, those public servants, acting under instructions
from their leaders, were neglecting to avail themselves of their
opportunities to learn the elementary scientific principles underlying
telegraphy, and were even repudiating the obligation to acquire
knowledge of those principles. The state of affairs was such that the
Engineer-in-Chief of the Telegraphs, Mr. W. H. Preece, began to fear
that before long he would be unable to fill the positions requiring an
elementary knowledge of the technics of telegraphy.[164]

Mr. Arnold Morley, Postmaster General, began his reply to Mr. Kearley's
Motion with the statement that "he understood the mover of the Motion
spoke on behalf of those in the Post Office service who had taken an
active part in the promoting what he might call an agitation, and that
his [Mr. Kearley's] position was that, in the condition of feeling in
the service, some steps ought to be taken which would enable the real
facts to be brought not only before the public, but before Parliament."
... He [Mr. Morley] had made a careful examination of most of the
alleged grievances during the three years he had been at the Post
Office, and though he had satisfied himself that in the main they were
not well founded, he recognized that a very strong feeling existed not
only among a portion of the staff, but also among the public, and among
Members of the House.

[Sidenote: _The Civil Servants' Campaign of Education_]

The feeling in question the Postmaster General attributed largely to
the manner in which the case of the telegraphists had been presented
by the telegraphists in the House of Commons, and in the newspaper
press. He spoke of the "extraordinarily misleading" table of promotions
published by the telegraphists. He then went on to state that recently
the Postmaster at Bristol had reorganized the local telegraph office.
By reducing the amount of over-time work, and by abolishing four
junior offices, he had effected a saving of $3,000 to $3,500 a year.
Thereupon a local newspaper had come out with the heading: "A Premium
on Sweating;" and had made the statement, which was not true, that the
local Postmaster had received a premium of $500 for effecting a saving
of $3,800 at the expense of the staff.[165] Mr. Morley continued with
the statement that in June, 1894, a deputation from the London Trades
Council had complained to the Postmaster General that skilled electric
light men were often employed by the Post Office at laborer's wages at
its factory at Holloway, citing the case of one Turner. Upon inquiry
the Postmaster General had learned that Turner had been employed as a
wireman, had been "discharged from slackness of work," and, upon his
own request in writing, had been taken back "out of kindness" as a
laborer. The same deputation had mentioned the case of one Harrison,
alleged to be earning on piece work, at the Holloway Factory, $1.75,
$2.25, and $3.75 a week. On inquiry the Postmaster had ascertained
that Harrison was able to earn $10 a week and more, but that "for the
purpose of agitation, he had deliberately lowered the amount of his
wages by abstaining from doing full work." After the Postmaster General
had informed the London Trades Council of the facts of the case, that
body had passed resolutions denouncing the postal authorities at the
Holloway Factories. Again, Mr. Churchfield, Secretary of the Postmen's
Federation, in an interview with the representative of a London
newspaper had stated that the shortest time worked by the men on split
duties was 12-3/4 hours, while the longest was 22 hours [in the course
of one day and night]. A duty of seven hours lasting from 8 p. m. to
10 p. m., and from 12 p. m. to 5 a. m., Mr. Churchfield had called a
continuous duty of twenty-two hours, lasting from 12 p. m. to 10 p.
m. The public also was "grossly misled" as to the condition of the
auxiliary postmen. For example, one Mears was alleged to earn, after
27 years' service, only $3 a week. Inquiry showed that Mears worked
in a warehouse during the day, and received from the Post Office $3 a
week for duties performed between the hours of 6 p. m. and 10 p. m.
Other cases had been reported, but in not one instance had the figures
been correct. One man in receipt of $3.94 a week, had been put down at
$2.62. The London auxiliary postmen received from 12 cents to 18 cents
an hour; they were mainly small tradesmen, shop assistants, and private
watchmen. In the country, the auxiliary postmen received from 8 cents
to 10 cents an hour.

The Postmaster General continued with the statement that the increases
in wages and the concessions granted by Mr. Fawcett and Mr. Raikes had
augmented the combined expenditures of the postal branch and telegraph
branch by $3,750,000 a year.[166] "In 1881, the wages formed 48.7
per cent. of the gross expenditure, whereas now they formed 59.9 per
cent.... He did not think that he need add to those figures, except
to say that in addition to salaries there were a large number of
allowances for special duties. In the circulation office in London
were 4,000 sorters, of whom 250 had each an allowance of $2.50 a
week, while a very large number had allowances of $1.25, $0.75 and
$0.50, of which never a word was said when complaints were made about
salaries." The demands made by the telegraphists would increase the
State's expenditures by $3,250,000 a year, "taking into account the
consequential advances which other classes in the Public Service,
treated on the same footing, would naturally receive." Similarly, the
letter sorters made an application involving a direct increase of
$635,000, and an indirect increase of another $2,500,000.

Mr. Morley next recited some statistics to show, "first of all, the
desire among people outside to come into the Post Office Service,
and secondly, the disinclination of those inside to go out." The
Post Office recently had called for 650 male letter sorters, and had
received 1,506 applications. A call for 188 "telegraph learners,"
had brought out 2,486 candidates. In London, in 1894, there had been
no resignations among 1,261 first class sorters, and 23 resignations
among 2,958 second class sorters. Out of 5,000 London postmen, 19 had
resigned in 1894; and in the 5 years ending with 1894, a total of
5,700 telegraphists had furnished 348 resignations, including the
resignations of women who left the service in order to marry.[167] "He
could not help thinking that when the working men got to know to the
full extent the terms and prospects of Postal Service, the sympathy
which they had so freely bestowed on Post Office employees would be
largely withdrawn."

[Sidenote: _The Government compromises with the Civil Servants_]

Mr. Morley, Postmaster General, summed up with the statement that
"he should be the last to deny that change and amelioration might be
required in certain respects, but, having examined all the cases, he
believed the men of the Postal Service, the Telegraph Staff as well as
the Postal Staff, were better treated than people from the same class
in private employment. But that opinion was not altogether shared
by the public, or by certain Members of the House of Commons, and
therefore the Government was prepared to appoint a strong Committee,
composed of men who would have special and practical knowledge and
experience of administration, and who would, he hoped, be assisted
by a Member of the Labor Department of the Board of Trade.... There
must be upon the Committee one official of the Post Office in order to
assist the Committee, but apart from that one appointment, he proposed
that the Committee should be appointed from executive officers of the
Government not connected with the Post Office."

Sir James Fergusson, who had preceded Mr. Morley as Postmaster General,
said: "He could not shut his eyes to the fact that there was no
difficulty whatever in finding candidates for employment in the Post
Office. In fact, it was impossible to meet the wishes of many of those
who desired to enter the Department. In those circumstances he thought
it could hardly be contended seriously that the remuneration offered
was grossly inadequate, or that the conditions of service were unduly
onerous."

The House of Commons accepted the compromise offered by the Government.
Lord Tweedmouth, Lord Privy Seal and a Member of the Cabinet, was
made Chairman of the Committee, which consisted, in addition, of Sir
F. Mowatt, Permanent Secretary of the Treasury; Sir A. Godley, Under
Secretary of State for India; Mr. Spencer Walpole, Permanent Secretary
to the Post Office; and Mr. Llewellyn Smith, of the Labor Department of
the Board of Trade.[168]

FOOTNOTES:

[120] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 15,119; Mr. Lewin Hill, Assistant Secretary,
General Post Office, London.

[121] _Return to an Order of the Honorable, The House of Commons_,
dated March 16th, 1898.

[122] _Parliamentary Paper_, No. 34, Session of 1876, Lord John
Manners, Postmaster General; and _Report of the Inter-Departmental
Committee on Post Office Establishments_, 1897, Mr. L. Hill, Assistant
Secretary, General Post Office, London; Appendix, pp. 1,095 and 1,099.

[123] _Report of a Committee Appointed by the Treasury to investigate
the Causes of the Increased Cost of the Telegraph Service since the
Acquisition of the Telegraphs by the State_, 1875, p. 5; _First Report
of the Civil Service Inquiry Commission_, 1875, p. 9; and _Report from
the Select Committee on Post Office_ (_Telegraph Department_), 1876;
Mr. E. Graves, Divisional Engineer; q. 1,566 and following.

[124] _Second Report of the Royal Commission on Civil Establishments_,
1888; Sir Lyon Playfair; q. 20,124 to 20,194; Sir Reginald E. Welby,
Permanent Secretary to the Treasury, 10,557 to 10,560; and Appendix, p.
570 and following.

[125] _Parliamentary Paper_, No. 286, Session of 1881.

[126] _Report from the Select Committee on Revenue Departments
Estimates_, 1888; Appendix No. 12, Mr. C. H. B. Patey, Third Secretary
to the Post Office.

[127] _Hansard's Parliamentary Debates_, August 16, 1881, p. 128.

[128] That is, he had given the telegraphists an interview.

[129] _Hansard's Parliamentary Debates_, August 16, 1881, p. 141.

[130] _The narrative ignores the parts of the scheme affecting the_
letter carriers and letter sorters.

[131] For an account of the organization and the duties of the
Treasury, as well as of the position and the duties of the Financial
Secretary to the Treasury, see Chapter XVII.

[132] _Parliamentary Paper_, No. 286, Session of 1881.

[133] In consequence of the fact that wages and salaries rise by annual
increments from the minimum to the maximum, some years must elapse
before the full effect of the increase in pay granted in 1881 would
be felt. It was assumed that in the first year the total increase in
expenditure would be $85,000, and that ultimately it would be $700,000.
In that connection it was common to speak of a mean increase of
$450,000.

[134] _Hansard's Parliamentary Debates_, June 26, 1882, p. 429 and 431.

[135] _Hansard's Parliamentary Debates_, March 29, 1883, p. 1,016.

[136] _Hansard's Parliamentary Debates_, April 24, 1884, p. 572.

[137] From 1874 to 1880 Sir S. A. Blackwood had been Financial
Secretary to the Post Office.

[138] _Report from the Select Committee on Revenue Departments
Estimates_; q. 403 and 404.

[139] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 11,641 to 11,648.

[140] _Second Report of the Royal Commission on Civil Establishments_,
1888; q. 10,562-3, 10,742 to 10,749, and 10,772 to 10,783.

[141] _Who's Who_, 1903, West, Sir Algernon E.; Was a clerk in the
Admiralty: Assistant Secretary to Sir C. Wood and Duke of Somerset;
Secretary to Sir C. Wood at India Office, and to Mr. Gladstone when
Prime Minister; Chairman of Board of Inland Revenue.

[142] _Second Report of the Royal Commission on Civil Establishments_,
1888; q. 17,438 to 17,447.

[143] _Second Report of the Royal Commission on Civil Establishments_,
1888; q. 20,238.

[144] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, Mr. Lewin Hill, Assistant Secretary, General
Post Office, London; q. 15,123 and 15,119.

The subjoined table shows the changes made in the wages of the second
class provincial telegraphists, who enter the service as boys and
girls, from fourteen years upward, and are taught telegraphy at the
cost of the Department.

========================+=================+================
| Wage Under the | Wage Under the
Age of the Telegraphist | Fawcett Scheme | Raikes Scheme
Years | $ | $
------------------------+-----------------+----------------
16 | 4.00 | 3.50
17 | 4.37 | 4.50
18 | 4.75 | 5.00
19 | 5.12 | 5.50
20 | 5.50 | 6.00
21 | 5.87 | 6.50
22 | 6.25 | 7.00
23 | 6.62 | 7.50
24 | 7.00 | 8.00
25 | 7.37 | 8.50
26 | 7.75 | 9.00
27 | 8.12 | 9.50
28 | 8.50 | 10.00
29 | 8.87 | 10.00
30 | 9.25 | 10.00
31 | 9.50 | 10.00
========================+=================+================

[145] _Hansard's Parliamentary Debates_, August 1, 1890, p. 1,623 and
following; April 17, 1891, p. 883; and August 1, 1891, p. 1,059 and
following.

[146] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 11,706.

[147] _Who's Who_, 1903, Compton, family name of Marquis of Northampton.

Northampton, 5th Marquis of, Wm. Geo. Spencer Scott Compton; was in
Diplomatic Service; Private Secretary to Lord Lieutenant of Ireland
(Earl Cowper), 1880 to 1882; Member of Parliament (G. L.) 1889 to 1897;
owns about 23,600 acres.

[148] _Hansard's Parliamentary Debates_, April 15, 1890, p. 581 and
following.

[149] _Hansard's Parliamentary Debates_, July 31, 1890, p. 1,441.

[150] _Hansard's Parliamentary Debates_, April 17, 1891, p. 851 and
following.

[151] _Hansard's Parliamentary Debates_, August 1, 1891, p. 1,059 and
following.

[152] _Hansard's Parliamentary Debates_, February 18, 1898, p. 1,109.
S. Woods quotes as follows from the circular issued by the Fawcett
Association in June, 1892: "Will you, in the event of being elected
a Member of Parliament, support a motion for the appointment of a
Parliamentary Committee of Inquiry into the Post Office Service, such
as was advocated by Earl Compton, and largely supported during the
recent Session of the House of Commons?"

[153] _Hansard's Parliamentary Debates_, June 14, 1892, p. 1,123 and
following.

[154] _Hansard's Parliamentary Debates_, June 20, 1892, p. 1,565 and
following.

[155] _Hansard's Parliamentary Debates_, August 28, 1893, p. 1,218.

[156] _Hansard's Parliamentary Debates_, May 17, 1895, p. 1,455, Sir A.
K. Rollit, one of the most aggressive champions of the demands of the
civil servants.

[157] _Who's Who_, 1903. Macdonald, J. A. M.; Member of Parliament for
Bow and Bromley, 1892 to 1895; Member of the London School Board for
Marylebone since 1897; Education: Edinburgh and Glasgow Universities.

[158] _Hansard's Parliamentary Debates_, September 16, 1893, p. 1,453
and following.

[159] _Who's Who_, 1905, Kearley, H. E., J. P., D. L., Member of
Parliament (G. L.), Devenport, since 1892. Director of Kearley and
Tonge, L't'd., tea importers and merchants; owns 1,200 acres. In 1906
Mr. Kearley became Political Secretary of the Board of Trade in the
Campbell-Bannerman Ministry.

[160] _Hansard's Parliamentary Debates_, May 17, 1895, p. 1,446 and
following.

[161] _Who's Who_, 1905, Rollit, Sir Albert Kaye, J. P., LL. D., D. C.
L., D. L., Member of Parliament, South Islington, since 1886. Partner
in Bailey and Leatham, steamship owners at Hull, Newcastle and London;
Director of National Telephone Co.; Mayor of Hull, 1883 to 1885;
President Associated Chambers of Commerce of the United Kingdom, 1890
to 1896; President London Chamber of Commerce, 1893 to 1898; Chairman
Inspection Committee Trustee Savings Bank since 1890; President of
Association of Municipal Corporations.

[162] In 1891-92 to 1894-95 the number of telegrams transmitted had
remained practically stationary.

Number of Telegrams
1890-91 66,409,000
1891-92 69,685,000
1892-93 69,908,000
1893-94 70,899,000
1894-95 71,589,000

[163] _Who's Who_, 1905, Rollit, Sir Albert Kaye, J. P., LL. D., D.
C. L., D. L., M. P., South Islington, since 1886. Partner in Bailey
and Leetham, steamship owners at Hull, Newcastle and London; Director
of National Telephone Co.; Mayor of Hull, 1883 to 1885; President
Associated Chambers of Commerce of the United Kingdom, 1890 to 1896;
President London Chamber of Commerce, 1893 to 1898; Chairman Inspection
Committee Trustee Savings Bank since 1890; President of Association of
Municipal Corporations.

[164] _Report of Bradford Committee on Post Office Wages_, 1904; q.
1,024; Mr. E. Trenam, Controller London Central Telegraph Office;
and q. 1,048, Mr. W. G. Kirkwood, a principal clerk in Secretary's
department, General Post Office.

[165] Compare also, _Hansard's Parliamentary Debates_, March 4, 1890,
p. 1,774. Mr. Cunninghame-Grahame: "I beg to ask the Postmaster
General whether it is the custom of the Post Office to give bonuses to
Inspectors or other officials for cutting down working expenses, and
whether continual complaints are being made of the arbitrary stoppage
of payment for over-time?" "No," was answered to both questions.

[166] In April, 1896, Mr. Lewin Hill, Assistant Secretary to General
Post Office, stated that on the basis of the staff of 1896, the Fawcett
and Raikes schemes were costing the Post Office Department $6,000,000 a
year in increased expenditure. The Postmaster General's statement of an
increase of $3,750,000 in the expenditure had been made on the basis of
the members actually employed in 1881 and 1891 respectively. _Report of
the Inter-Departmental Committee on Post Office Establishments_, 1897;
q. 12,382 and 15,123.

[167] Compare _Report of Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. Lewin Hill, Assistant Secretary to General
Post Office; q. 15,272.

On April 1, 1891, there were employed at 57 of the largest post offices
in the United Kingdom, 2,614 first class and second class male letter
sorters. In the next 5 years there resigned, in all, 95 sorters. Twelve
of that number resigned in order to avoid dismissal.

On April 1, 1891, there were employed at 96 of the largest telegraph
offices, 4,211 first class and second class male telegraphists. In the
next 5 years there were 235 resignations. Of the men who resigned, 12
avoided dismissal, 23 left because of ill health, 38 went to South
Africa, 28 obtained superior appointments in the Civil Service, by
open competition, 11 enlisted with the Royal Engineers, 1 entered the
service of an electric light company, 1 became a bank clerk, 2 became
commercial travelers, 3 went to sea, 4 emigrated to the United States,
and 48 entered the service of the British Cable companies, which pay
higher salaries than the Post Office, but work their men much harder
and demand greater efficiency than does the Post Office.

[168] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, is the official title of the Committee's Report.

CHAPTER X

THE TWEEDMOUTH COMMITTEE REPORT

The Government accepts all recommendations made by the
Committee. Sir Albert K. Rollit, one of the principal
champions in the House of Commons of the postal employees,
immediately follows with a motion "intended to reflect
upon the Report of the Tweedmouth Committee." Mr. Hanbury,
Financial Secretary to the Treasury, intimates that it
may become necessary to disfranchise the civil servants.
The Treasury accepts the recommendations of the so-called
Norfolk-Hanbury Committee. The average of expenses on account
of wages and salaries rises from 11.54 cents per telegram
in 1895-96, to 13.02 cents in 1902-03, concomitantly with
an increase in the number of telegrams from 79,423,000 to
92,471,000.

In the preceding chapter the narrative was brought down to the
appointment in 1895, of the so-called Tweedmouth Committee.[169] That
Committee consisted of Lord Tweedmouth, Lord Privy Seal and a Member
of the Cabinet; Sir F. Mowatt, Permanent Secretary of the Treasury;
Sir A. Godley, Under Secretary of State for India; Mr. Spence Walpole,
Permanent Secretary of the Post Office; and Mr. Llewellyn Smith, of the
Labor Department of the Board of Trade.

In the "Terms of Reference to the Committee on Post Office
Establishments," the Postmaster General included this paragraph: "In
conducting this inquiry, I can have no doubt you will recollect that
the Post Office is a great Revenue Department; and that, in the words
of the _Select Committee on Revenue Departments Estimates_ in 1888,
it 'is most likely to continue to be conducted satisfactorily, if it
should also continue to be conducted with a view to profit, as one of
the Revenue yielding Departments of the State.'"[170]

[Sidenote: _No Service like the Public Service_]

Before the Tweedmouth Committee Mr. Lewin Hill, who, as Assistant
Secretary General Post Office, was the executive officer who had
general charge of all the postal and telegraph employees outside
of London, testified as follows: "My own view is that the time has
come for telling the postmen, in common with the members of the rest
of the manipulative staff [the telegraphists] in answer to their
demand for a general rise of wages, that the Post Office Department
is satisfied that the wages already paid are in excess of the market
value of their services; that this being so, no general addition to
pay will be given, and that if the staff are dissatisfied, and can
do better for themselves outside the Post Office, they are, as they
know, at perfect liberty to seek employment elsewhere." The Chairman,
Lord Tweedmouth, asked Mr. Hill: "Do you think there is any other
particular class of employment which is comparable with that of the
postmen [and telegraphists]?" Mr. Hill replied: "I thought of railway
servants, whose work in many ways resembles the work of our employees.
If they have not the same permanence [of tenure] as our own people
have, they have continuous employment so long as they are efficient,
but our people have continuous employment whether they are efficient
or not.... In that respect all of us in the Postal Service stand in
a unique position, from top to bottom our men are certain as long as
they conduct themselves reasonably well to retain their maximum pay
down to the last day they remain in the Service, and whatever their
class may be, whether postmen, or sorting clerks, or telegraphists, or
officers of higher grade, they continue, failing misconduct, to rise
to the maximum pay of their class, quite regardless of whether they
are worth the higher pay that they get from year to year." The only
concession that Mr. Hill was willing to recommend was, that in the
larger towns the time required for postmen and telegraphists to rise
from the minimum scale of pay to the maximum be reduced from 13 years
to 6 years.[171]

Mr. J. C. Badcock, Controller of the Metropolitan Postal Service
other than the Service in the London Central Post Office, and Mr. H.
C. Fischer, Controller of the London Central Post Office, joined in
Mr. Lewin Hill's recommendation. Mr. Fischer added that the London
telegraphists should be given better chances of passing from the second
class to the first class than they had enjoyed in the last three or
four years,[172] and that the pay of the London senior telegraphists,
who were a kind of assistants to the assistant superintendents, ought
to be raised above the existing scale of $950.

Mr. C. H. Kerry, Postmaster at Stoke-on-Trent, stated that if the
Post Office Department "was willing to act, not only the part of the
model employer, but of an exceptionally liberal employer; and it was
thought after all that had been done for the staff so recently, that
still a little further should be done," the Department might reduce
from 13 years to 5 years the period that it took the rank and file to
pass from the minimum salary of their class to the maximum salary. But
there was no necessity of doing anything for any one, "on a general
consideration of the pay given elsewhere to persons performing duties
requiring about the same amount of intelligence." There was "absolutely
no justification" for increasing the existing maximum of pay.

Mr. Kerry had entered the Post Office telegraph service in 1870,
after having served with the Electric and International Company from
1854 to 1870. He said: "The speed at which the telegraphists had to
work present, that is the speed per man,[173] because the telegraph
companies kept only enough force for the minimum work, and when the
work increased you had to catch that up by increased effort.... As a
previous witness said, one of the laws of the service is that there
must be no delay, but I think there is a well understood law, also,
that there must be no confusion, and the arrangements made are now
such that the maximum of work, as a rule, can be dealt with without
undue pressure.... From 1870 to 1889, I was constantly in the Telegraph
branch and witnessing from day to day, and almost from hour to hour,
the work which the telegraphists performed." ...[174]

This testimony from Mr. Kerry must be borne in mind when reading the
complaints of the Post Office telegraphists that the salaries paid by
the Eastern Telegraph [Cable] Company rise to $1,020 a year, whereas
the salaries of first class telegraphists in London rise only to $950.
The employees of the Eastern Telegraph Company have to work under so
much greater pressure than the State telegraphists, that Mr. Fischer,
Controller of the London Central Telegraph Office, was able to state:
"I have never known a telegraphist in the first class to leave our
service for that of any of the [Cable] companies. The cable companies
draw very few men from us, and those drawn away as a rule, are young
men in the second class who are receiving about $250 or $300, and are
attracted by the prospect of an immediate increase of some $150 upon
entrance into the service of the cable companies."[175]

* * * * *

[Sidenote: _The Tweedmouth Committee's Recommendations_]

Those telegraph offices which are not sufficiently important to justify
the employment of telegraphists of the first class, are divided into
four groups: B, C, D and E. The Tweedmouth Committee recommended that
the maximum salary of the telegraphists in the offices of Group E be
raised from $8 a week to $8.50: in offices of group D from $8.75 to
$9; in offices of group C from $9.50 to $10; and in offices of group
B from $10 to $11. It recommended furthermore that all provincial
telegraphists should rise automatically and without regard to
efficiency, to a salary of not less than $10 a week. Beyond $10 they
should not go, unless fully competent. The Committee added that it
placed "the efficiency bar at the high figure of $10 a week,[176] for
the special reason that it may be rigorously enforced, and that all
inducements to treat it as a matter of form, liable to be abrogated for
the reason of compassion, may be removed."

As for the telegraphists employed in Metropolitan London, the
Tweedmouth Committee recommended that all telegraphists should rise at
least to "the efficiency bar" of $560 a year; and that those who could
pass the efficiency bar, should rise automatically to $800, the maximum
salary of first class telegraphists. In the past, telegraphists in
London had been promoted from the second class to the first class, only
upon the occurrence of vacancies. In this case, also, the Committee
added to its recommendation the words: "This efficiency bar has been
placed at the high figure of $560 for the special reason that it may be
rigorously enforced, and that all inducements to treat it as a matter
of form, liable to be abrogated for reasons of compassion, may be
removed."[177]

These recommendations the Tweedmouth Committee made in order to meet
the complaints advanced by the Post Office employees that the falling
off in the rate of increase of the business of the telegraph branch had
caused a slackening in the flow of promotion.

The remaining recommendations of the Tweedmouth Committee it is not
necessary to enumerate; suffice it to say, that the Postmaster General,
the Duke of Norfolk, advised the Government to accept all of the
Committee's recommendations, with the statement that, on the basis of
the staff of 1897, the cost of carrying out the recommendations would
begin with $695,000 a year, and would rise ultimately to $1,375,000.
That estimate related to both branches of the Post Office, the postal
branch and the telegraph; no separate estimates were made for the
several branches.

[Sidenote: _The Government accepts the Committee's Recommendations_]

The Lords Commissioners of Her Majesty's Treasury accepted the
Postmaster General's recommendations, and directed the Financial
Secretary of the Treasury, Mr. R. W. Hanbury, to write as follows to
the Postmaster General.

"It has, of course, been necessary for my Lords to consider very
carefully proposals involving so large an increase of expenditure
in a single Department at one time, and they have duly weighed the
reasons which the Committee adduces in support of its conclusions.
While many of the proposals appear to be abundantly justified by the
considerations put forward, there are others which my Lords would have
hesitated to accept on any authority less entitled to respect than
that by which they are supported. But, my Lords readily acknowledge
the exceptional competence of the Committee to pronounce a judgment
on the question which came before it, and the great care with which
the inquiry has been conducted. They also note that the conclusions
represent the unanimous opinion of the Committee, and that they are,
in all cases, endorsed by your Grace. They have therefore decided,
in view of the weight of authority by which your recommendations are
supported, to accept them as they stand, and they authorize you to give
effect to them as from the first of April next. They have adopted this
course from a strong desire to do full justice to one of the largest
and most important services of the State, and because they feel that
the settlement now effected must be accepted as permanently satisfying
all reasonable claims on the part of the classes included in its terms.
The only condition which my Lords desire to attach to their acceptance
of your proposals is that the annual increments of pay should, in
all cases, be dependent on the certificate of a superior officer,
that the conduct of the recipient during the preceding year has been
satisfactory."

* * * * *

[Sidenote: _Sir A. K. Rollit demands a Committee of Business Men_]

The recommendations of the Tweedmouth Committee went into effect on
April 1, 1897. On July 16, 1897, while the House of Commons was in
Committee of Supply, Sir Albert K. Rollit moved the reduction of the
salary of the Postmaster General by $5,000.[178] Sir Albert Rollit
said: "The Amendment was intended to reflect upon the report of the
Tweedmouth Committee, rather than upon either the Government or the
Post Office Department, for he thought more might be done to remedy
the abuses which were known [shown?] to exist in the course of the
report itself. To speak of the Post Office as a revenue earning machine
was, in his opinion, not a full or adequate description. He shared to
the full the opinion that its first object was to give facilities to
the public rather than merely to earn profits, and also to do justice
to its employees.... There were grievances which had not been redressed
by the report, and the House had a great deal more to do in that
direction. It was no answer to say that the Treasury had appropriated
a large sum of $695,000 for that very purpose, for after all, what did
the appropriation amount to? It only amounted to a rectification of the
inadequacies of the past. It was not in London alone, but throughout
the United Kingdom, that something like chronic discontent existed.
The complaints were loud and widespread. He did not at all agree as to
the propriety of the course intimated [by the telegraphists] by way
of notice to the Postmaster General, that if the grievances were not
redressed, over-time work at night would be suspended [_i. e._ the
telegraphists would refuse to work over-time in order to compel the
Government to redress their grievances]. That was an extreme remedy in
cases where the public convenience and service were concerned; but,
after all, every man's labor was his own right, and if there were no
disposition to remedy present grievances, even that extreme way of
trying to bring about a remedy might possibly have to be resorted
to. The Treasury was, of course, a barrier to a good deal. He did
not say the heads of a Department did not value as much as he might
do pecuniarily the services of those who contributed to the joint
effect which he and they made for the public advantage, and if we had
a splendid Civil Service in this country, he thought it had one great
defect, and that was too glaring disproportion between the salaries of
the highest officials and those of the lower, and this proportion might
well be redressed."

Sir Albert Rollit said he could not enumerate all the grievances,
he would have to confine himself to the enumeration of the worst
ones. He began by endorsing the contention of the telegraphists that
everybody should rise automatically to a salary of $1,000 a year. The
establishment of the "efficiency bars" he said, "was really a violation
of the contract with the telegraph operators, and was a grave and
gross injustice to them." He maintained, also, that the Committee's
recommendation that the payment for Sunday labor be reduced from
double rates to a rate and a half was "a material alteration of the
contract under which servants entered the Department." He supported
the contention of the State employees that it was a grievance that
some of the employees had to take their annual vacation in the winter
months. "The postmen had asked that the Christmas boxes [contributions
from the public] be abolished, $26 a year being added to the wages as
a compromise. Evidence had been given that $1.25 a year was the real
value of the Christmas boxes, but the Committee said there should be
no solicitation for Christmas boxes, and no compensation for their
loss." "He hoped that a statement of grievances, which were provoking
the strongest possible feeling, with disadvantage to the efficiency
of the Post Office, would be listened to. He was extremely glad to
recognize that the Postmaster General had been willing to receive two
deputations--one on June 15, which had not yet been replied to, and one
yesterday. But he would urge upon the Department and the Government
that the real remedy for this strong and wide discontent was the
appointment of an independent Committee, because the decision of such
a tribunal composed not of officials, but of practical business men,
who would perhaps have more sympathy with men in the lower grades of
the service, would be loyally accepted, and thus the public would be
advantaged and contentment restored to a service which was of great
value to the country." ["Hear, hear."]

Mr. R. W. Hanbury, who, as Financial Secretary to the Treasury,
represented in the House of Commons the Postmaster General, the Duke of
Norfolk, replied: "that throughout the discussion some facts had been
more or less left out of sight. Honorable Members ought to recollect,
in the first place, that the Tweedmouth Committee gave universal
satisfaction when it was appointed. It was then agreed that it was the
right kind of Committee; and that the right kind of men were appointed
to serve upon it. There was no preponderance of Treasury opinion upon
the Committee. In fact, the only Treasury official sitting upon it was
Sir Francis Mowatt. There was on it a high representative of the Post
Office, and the officials of a Department were not as a rule anxious
to cut down the salaries of their subordinates. Their tendency would
rather be to recommend an increase in salaries. There was also on the
Committee a representative of the Labor Department of the Board of
Trade, who was particularly well qualified to give an opinion as to
the proportion which the wages of the postal and telegraph employees
bore to the wages of persons doing corresponding work outside the
Post Office. Therefore the Committee was a very efficient body, and
through its recommendations the salaries of the officials had already
been increased by $700,000 a year, and the increase would amount to
something like $1,250,000 a year in the next few years. The Treasury
had accepted every recommendation of the Committee, whose suggestions
had been adopted wholesale. There was no ground for complaint,
therefore, in that direction."

[Sidenote: _Disfranchisement of Civil Servants Suggested_]

"Another fact which Members ought not to overlook was the political
pressure which was far too frequently exercised by Civil Servants upon
those who also represented them." ["Hear, hear."] "That was a great and
growing danger. It was chiefly in London that this pressure was brought
to bear.... He would give an instance of the way in which these Civil
Servants spoke of the expediency of political pressure. At one of the
great meetings which had been held, a speaker said there were 8,000
postmen in London, and that he hoped every one would have his name upon
the register [of voters], so that at election times they could exercise
their influence upon candidates and advocate the cause of higher
wages. He was of the opinion that political pressure ought not to be
brought to bear in that way." ["Hear, hear."] "Ordinary workmen could
not exercise the same power, but Civil Servants could, and, whether
their agitation succeeded or not, their position was secure, so that
it was a case of 'Heads, I win; tails, I don't lose'.... Before the
Royal Commission [of 1888], which had inquired into the Civil Service
establishments, evidence was given with regard to the way in which
pressure was brought to bear in certain constituencies upon Members,
and he thought that the almost unanimous feeling of the Commission
was that, if this state of things continued, it would be necessary to
disfranchise the Civil Service." ["Hear, hear."][179]

Sir Albert Rollit replied: "They had to acknowledge a very sympathetic
speech from the Secretary to the Treasury. Perhaps if some honorable
Members went to the Treasury in regard to this matter, accompanied
by one person who might represent practically the views which were
entertained by those concerned, the matter might be further gone into.
He begged leave to withdraw his Amendment."

The Secretary to the Treasury replied: "There was no objection on
the part of the Treasury to hearing communications from Members of
Parliament on the subject, but with regard to officials of the Post
Office coming to the Treasury, he should not like to give any pledge
without first consulting with the Postmaster General."

[Sidenote: _The Norfolk-Hanbury Committee_]

Shortly afterward the Postmaster General, the Duke of Norfolk, and
the Financial Secretary to the Treasury, Mr. Hanbury, constituted
themselves a Committee to investigate the grievances that the
Tweedmouth Committee had left unredressed. All Members of the House
of Commons were invited to attend the meetings of the Norfolk-Hanbury
Committee, and to take part in examining the witnesses. Sir Albert
Rollit presented the case of the Post Office employees. The
Norfolk-Hanbury Committee recommended further concessions involving an
additional outlay of $400,000 a year; and the Treasury accepted the
recommendations.

The Report of the Postmaster General for the year 1897-98 stated that
the concessions granted would entail a total increase of expenditure of
$1,940,000 a year. The Duke of Norfolk concluded his reference to the
foregoing episodes with the words: "Since that time I have declined,
and I shall continue to decline, to allow decisions which have been
considered by the Tweedmouth Committee, and which have been revised
by Mr. Hanbury and myself, to be reopened. It is my belief that those
decisions have been liberal, but whether they are liberal or not, it is
for the interest of all parties that it should be understood that they
are final."

In April, 1900, Mr. R. W. Hanbury, Financial Secretary to the Treasury,
stated the concessions granted by the Tweedmouth and Norfolk-Hanbury
Committees were costing $2,200,000 a year. In April, 1901, Mr. Austen
Chamberlain, Financial Secretary to the Treasury, said they were
costing $2,500,000 a year; and in April, 1903, he stated that they were
costing $3,000,000 a year.[180] Those figures related to the combined
postal and telegraph service. So far as the latter service alone is
concerned, the average expenses on account of wages and salaries rose
steadily from 11.54 cents per telegram in 1895-96, to 13.02 cents in
1902-03, under an increase in the number of messages from 79,423,000 in
1895-96, to 92,471,000 in 1902-03. In 1905-06, the average in question
rose to 14.29 cents, partly in consequence of the increases in wages
made in response to the demands of the Civil Servants, partly in
consequence of the drop in the number of telegrams to 89,478,000--as a
result of the growing competition from the telephone.

In 1895-96 the receipts of the Telegraph Department proper exceeded
the operating expenses by $646,000; in 1900-01, the operating expenses
exceeded the receipts by $34,000; in 1903-04 the deficit rose to
$1,505,000, and in 1904-05 it was $917,000. In 1905-06, the gross
revenue exceeded the operating expenses by $63,500.[181]

FOOTNOTES:

[169] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, is the official title of the Committee's Report.

[170] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, p. 4.

[171] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 15,119 and following, 11,706, 11,694, 15,123,
11,642 to 11,648, 11,680 to 11,697, 11,774 and 11,805.

[172] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 4,183 to 4,185, 3,907 to 3,912, 3,868 to
3,879 and 4,140 to 4,149.

[173] Mr. Kerry probably meant that the employees of the companies
worked under greater pressure.

[174] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 6,747 and following, and 6,691 to 6,694.

[175] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 3,863 and 3,853.

[176] Compare: _Second Report of the Royal Commission appointed to
inquire into the Civil Establishments_, 1888, p. xvi. In 1888 the
salaries of the Lower Division Clerks of the Civil Service ranged from
$475 to $1,250. The Royal Commission recommended that in the future
the salaries in question should range from $350 to $1,750, with an
efficiency bar at $500 at the end of seven years' service, and a second
efficiency bar at $950 at the end of nineteen years' service.

[177] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, pp. 9, 11 and 1,088; and q. 4,256 and following,
4,161 to 4,162, 15,126 to 15,134, and 3,913 to 3,937.

[178] _Hansard's Parliamentary Debates_, July 16, 1897, p. 323 and
following.

[179] Compare also _Hansard's Parliamentary Debates_, April 9, 1896,
p. 597, Mr. R. W. Hanbury: "He had sat for some years as a member of
the Royal Commission upon Civil Service Establishments, and the Members
of that Commission had been greatly struck by the enormous pressure
that civil servants in particular constituencies were able to bring to
bear upon candidates, and in his view the House ought not to adopt any
line of action that would encourage that pressure being brought into
operation. So great, indeed, had been the abuses that it had even been
suggested that civil servants ought to be disfranchised altogether....
Another great danger that had to be provided against was that in
certain London constituencies, and in some of the large towns, it was
quite possible that the civil servants might, by combining together,
succeed in turning the balance at an election in the event of one of
the candidates refusing to pledge himself with regard to raising the
scale of wage, or an increase in the amount of pensions, or similar
advantages which the civil servants might desire to obtain."

[180] _Hansard's Parliamentary Debates_, April 27, 1900, p. 135; April
25, 1901, p. 1,325; and April 30, 1903, p. 1,022.

[181] _Report of the Postmaster General_, 1906.

CHAPTER XI

THE POST OFFICE EMPLOYEES CONTINUE TO PRESS THE HOUSE OF COMMONS FOR
INCREASES OF WAGES AND SALARIES

The Post Office employees demand "a new judgment on the
old facts." Mr. S. Woods' Motion, in February, 1898. Mr.
Steadman's Motions in February and June, 1899. Mr. Hanbury,
Financial Secretary to the Treasury, points out that the
postal employees are demanding a House of Commons Select
Committee because under such a Committee "the agitation and
pressure, now distributed over the whole House, would be
focussed and concentrated upon the unfortunate members of the
Select Committee." Mr. Steadman's Motion, in April, 1900. Mr.
Bayley's Motion, in June, 1901. Mr. Balfour, Prime Minister,
confesses that the debate has filled him "with considerable
anxiety as to the future of the public service if pressure
of the kind which has been put upon the Government to-night
is persisted in by the House." Captain Norton's Motion, in
April, 1902. The Government compromises by appointing the
Bradford Committee of business men. Mr. Austen Chamberlain,
Postmaster General, states that members from both sides of the
House "seek from him, in his position as Postmaster General,
protection for them in the discharge of their public duties
against the pressure sought to be put upon them by employees
of the Post Office." He adds: "Even if the machinery by
which our Select Committees are appointed were such as would
enable us to secure a Select Committee composed of thoroughly
impartial men who had committed themselves by no expression of
opinion, I still think that it would not be fair to pick out
fifteen members of this House and make them marked men for the
purpose of such pressure as is now distributed more or less
over the whole Assembly."

[Sidenote: _Civil Servants demand Right to agitate_]

On February 18, 1898, in the House of Commons, Mr. S. Woods[182] moved:
"And we humbly represent to Your Majesty that your servants in the
Post Office are not permitted to exercise the franchise, generally
allowed to other Departments in the State; nor to serve on electoral
committees; nor to take part in political agitation; and are otherwise
deprived of the privileges of citizenship in defiance of the letter
and spirit of the law; that the officials of the Post Office refuse to
recognize the Postmen's Trade Union; their officials are illegally and
unjustly dismissed for circularizing Parliamentary Candidates; and we
humbly beg Your Majesty to instruct the Postmaster General to remedy
these grievances."[183]

Sir James Fergusson, a former Postmaster General, said Mr. Woods'
motion had been brought "by the direction of the central Committee of
the Postal Union, or some such party." He continued with the statement
that the motion was the outcome of the agitation carried on since he,
Sir James Fergusson, had dismissed from the Post Office service Messrs.
Clery and Cheeseman, the ringleaders of a political campaign carried
on in violation of Sir James Fergusson's order of June 17, 1892. He
said the employees in the Revenue Departments had been disfranchised
in 1782 by the Marquis of Rockingham, Prime Minister, but that the
franchise had been restored to them in 1868. That in that year both Mr.
Disraeli and Mr. Gladstone had approved the policy of enfranchising
the employees of the Revenue Departments, subject to the limitation
that the ministerial heads of the Departments were to have the power to
determine the limits within which the employees were to take an active
part in politics. That an attempt had been made in 1874 to remove that
limitation, but that the House had supported the Government of the day
in resisting the attempt.[184]

[Sidenote: _House of Commons is Civil Servants' Court of Appeal_]

Mr. R. W. Hanbury, Financial Secretary to the Treasury, and
representative in the House of Commons of the Postmaster General, the
Duke of Norfolk, said, in the course of his reply to Mr. Woods: "We
must recognize the fact that in this House of Commons, public servants
have a Court of Appeal such as exists with regard to no private
employee whatever. It is a Court of Appeal which not only exists with
regard to the grievances of classes, and even of individuals, but it is
a Court of Appeal which applies even to the wages and duties of classes
and individuals, and its functions in that respect are only limited by
the common sense of Members, who should exercise caution in bringing
forward cases of individuals, because, if political influence is
brought to bear in favor of one individual, the chances are that injury
is done to some other individual.... I think it is only reasonable to
expect that, as both [political] parties in the State have dropped
party politics with regard to their employees, the employees should
in turn recognize that fact, and drop party politics with regard to
their employers." Mr. Hanbury enforced this point by stating that, upon
the request of the Civil Servants themselves, Lord Rockingham, Prime
Minister, in 1782 had disfranchised the Civil Servants in the Revenue
Departments. At that time the party in power, through the Public
Service, controlled 70 seats in Parliament. Lord North, who had been
in power twelve years, had sent out notices to certain constituencies
where the Civil Servants were able to turn the scale, saying, that
unless the Civil Servants supported the Government, it would go hard
with them. Thereupon the Opposition had sent out counter notices, and
thus had put the Civil Service in an awkward position. The result had
been that the Civil Servants themselves had requested Lord Rockingham
to disfranchise them.

Mr. Hanbury continued with the statement that, in 1892, Sir James
Fergusson had dismissed Mr. Clery for ignoring his order forbidding
Civil Servants to "circularize" parliamentary candidates. Thereupon
Mr. Clery, at Newcastle-on-Tyne, had said to a political meeting
of postmen: "They must approach the House of Commons on its weak
side; they must influence Members through their susceptibilities as
opportunity presents itself when candidates appeal to their respective
constituencies. A man is never more amenable to reason than when making
a request." Mr. Hanbury continued: "What private employee is able to
say: 'I am the permanent servant of my employer; I have a share in
declaring who that employer shall be; I will attack him on his weak
side when he comes up for re-election, and then I will use my power? I
will bring organized pressure to bear throughout the constituencies,
and I will make this bargain: that if he will not vote for an increase
in my pay, or diminish my duties, then I will not give him my vote.'
We have done away with personal and individual bribery, but there is
still a worse form of bribery, and that is when a man asks a candidate
to buy his vote out of the public purse. There are three great things
which distinguish our permanent public service. There is, in the first
place, the remarkable loyalty with which they serve both parties in
the State. Then there is the permanency of their employment. Again,
a great feature of that service is that no longer is it a question
of favoritism, but promotion by merit is the rule. Those three great
features have been slowly built upon this foundation--the elimination
altogether of the element of political partisanship from the service.
I hope nothing will be done to break down those foundations, on which
alone the public service can rest--a service which, for its efficiency,
its loyalty, and its high sense of public duty, I do not think is
surpassed. I doubt whether it is equalled or even approached."

Mr. Woods' Motion was lost by a vote of 163 to 86. It was supported
almost exclusively by the Opposition, only three Government supporters
voting for it.[185]

[Sidenote: _Mr. Steadman demands a Select Committee_]

In the House of Commons, on February 20, 1899, Mr. Steadman[186]
moved: "And we humbly represent to Your Majesty that, in view of the
great discontent existing among employees of the Postal and Telegraph
Services, immediate inquiry should be made into the causes of
complaint."[187] Mr. Steadman had been elected to the House of Commons
by a majority of twenty votes.

[Sidenote: _Parliament not competent to judge_]

Mr. R. W. Hanbury, Financial Secretary to the Treasury, replied that
no new facts had been brought to light since the Tweedmouth Committee
and the Norfolk-Hanbury Committee had made concessions entailing an
annual expenditure of $1,900,000 a year. The Post Office servants
were demanding "a new judgment on the old facts." He continued: "I
confess, I am not quite sure that we did not go too far [in 1897],
because by increasing these salaries we are bringing into this service
an entirely new social class; you are bringing in men who perhaps are
socially a little above their work, and these men naturally have a
standard of living and requirements which are not essential to men
doing this kind of work. If we are going to raise the salaries more
and more, you will get a higher social class into the service, and
there will be no limit to the demands made upon us." Mr. Hanbury
continued: "You have got to trust the heads of the Departments, or get
new heads; it is quite impossible for the House of Commons to go into
all these technicalities, and I know no Department where the work is
more technical and more complicated than the Post Office. The Treasury
work is supposed to be hard to learn [by the Members of the House of
Commons working for promotion to the Ministry], but the technicalities
of the Post Office is about the most difficult job I ever had, and I
do not think a Select Committee would be really able to get to the
bottom of this matter. But, after all, we must recollect another
fact, and it is this: that the Civil Service is a great deal too much
inclined to attempt to put pressure upon Members of Parliament. That
is a very bad system, upon which we ought to put our foot. It is bad
enough when it is brought to bear upon the House as a whole, but what
would happen with a Select Committee of this House? You would have the
resentment of the Civil Service focussed and concentrated upon the
unfortunate Members of the Committee, and I do not think it would act
more independently or more impartially than those two bodies which have
sat already."

Mr. Steadman's Motion was lost by a vote of 159 to 91. Eighty-six
members of the Opposition and two Government supporters voted for the
Motion.[188]

* * * * *

[Sidenote: _Civil Servants have "Friends" in the Commons_]

On June 1, 1899, Mr. Steadman moved the reduction of the Postmaster
General's salary by $500, by way of asking the House of Commons
to instruct the Government to appoint a Select Committee of the
House of Commons to investigate the grievances of the Post Office
employees.[189] He said: "It stands to reason that a Departmental
Committee [Tweedmouth Committee] composed of officials, which contained
only one impartial member--a Member of the House of Lords--could not
be satisfactory to the 160,000 male and female employees in the Post
Office service.... Every department of the Post Office service now has
its organization. All these organizations right through the departments
have their coaches and organizers; true, they are not yet directly
represented here in this House, but they have friends here who are
prepared to take up their quarrels."

Captain Norton[190] seconded the Motion. He spoke of the fact that
any telegraphist could obtain $30 a year extra pay by making himself
competent to discharge the duties of a letter sorter, and another $30
by passing an examination on the technical questions of telegraphy.
He asserted that it was a grievance that the men had to acquire, in
their leisure hours, the additional proficiency in question; and that
only 46 per cent. of the men were able to pass the examinations on the
technical questions involved in telegraphy.

Mr. Maddison[191] supported Mr. Steadman's Motion with the words: "For
my part, I have always had some hesitation in taking up the cases of
men employed by the State, because undoubtedly there is a sort of
notion that, because they are employed by the State, they can make
such demands as they like, because they are paid out of a very full
Treasury. I know that every half penny of that money comes out of the
general taxation of the country, and I agree that we are here as the
guardians of the public purse. The Right Honorable Gentleman has never
denied that we are here as the guardians of these men's interest, and
it has not been shown that the public interest is of greater importance
than the interest of these men, who do so much for the prosperity of
the Country.... In this case we want a non-official committee, although
I confess that I do not think such an inquiry will put an end to
disputes in the future."

Mr. Hanbury, Financial Secretary to the Treasury, said that if the
Government yielded to the demand for a House of Commons Committee
in this case, there would be a House of Commons Committee sitting
practically every session of Parliament. The points now under
discussion had been under agitation for four, five, or six years.
Before the Tweedmouth Committee entered upon its duties, and before
the Norfolk-Hanbury Conference with Members of the House of Commons,
the Government had a distinct understanding with Members of the House
that the decisions come to should be accepted. Mr. Hanbury continued:
"It is somewhat difficult, no doubt, to draw a comparison between
what the Post Office pays and what is paid by private firms. But I
will give one comparison, at any rate, and I think it is the only one
possible. A few years ago we took over from the National Telephone
Company the employees, principally women, who were engaged on the
[long-distance] trunk wires, and I venture to say that, counting in
the pensions we pay, these people are receiving from 30 per cent. to
40 per cent. larger salaries than when they were in the employment of
the company. Honorable Members who draw comparisons between servants of
the State and others, are too apt to forget the great facilities Post
Office servants get, such as constant employment, large pensions, good
holidays, for which they are paid, and large sick-pay and sick-leave.
If these are added together, it will be found that the Post Office is
paying wages considerably above the level of those paid by outside
employers. I should like to say one further word with regard to this
application for a Committee of this House. Why should we have it at
all? Let me speak with perfect frankness about this thing. We have
already had two Committees; we have also had a great deal of pressure
brought to bear upon Members; that pressure is becoming almost
intolerable. The honorable Member for Newington posed as the just
judge and said: 'I am weary of all this agitation; let us try to put
an end to it.' Well I am not weary of the agitation; so long as I am
satisfied, as I am now, that everything has been done that ought to be
done for the men, I will not yield to agitation. I say at once that I
do myself believe that, considering everything, and that full inquiry
has already been held, the only advantage these men could derive
from a House of Commons Committee would be that the agitation and
pressure, now distributed over the whole House, would be focussed and
concentrated upon the Select Committee. I, for one, am not prepared to
grant a Committee of that kind."

Mr. Steadman's Motion was lost by a vote of 157 to 107; ninety-seven
members of the Opposition and nine Government supporters voting for the
Motion.[192]

* * * * *

[Sidenote: _Mr. Steadman's third demand for a Select Committee_]

On April 27, 1900, Mr. Steadman moved the reduction of the Postmaster
General's salary by $2,500.[193] He said: "I rise for the purpose of
advocating the claims of the 160,000 persons employed in the Post
Office for a fair and impartial Committee of Inquiry to be elected by
this House to look into their grievances."

The contention that there were grievances, Mr. Steadman supported
with the following arguments. From 1881 to 1891, the Civil Service
Commissioners, in issuing notices that they would hold competitive
examinations for intending entrants into the telegraph service, had
stated that in London telegraphists had "a prospect of obtaining
[ultimately] $950 a year." That, argued Mr. Steadman, was a contract
between the Government and the telegraphists who entered the London
service between 1881 and 1891, that every such telegraphist should
rise to $950. The Government therefore had committed a breach of
contract when, in 1892, it had announced that good character and good
skill as an operator would not secure a telegraphist promotion to the
senior class, in which the salary rose from $800 a year to $950. To be
eligible for promotion to the senior class, a man must be not only an
excellent telegraphist, but must, in addition, possess such executive
ability as would enable him to act as an overseer, or as assistant to
the Assistant Superintendent.

Mr. Steadman continued: "Now I come to the question of the postmen.
Goodness knows where all that $1,950,000 a year has gone to. You cannot
get away from the fact that the postman to-day in London commences
[at the age of 16 years to 18 years] with a minimum wage of $4.50 a
week.... Fancy that, Mr. Chairman, a man commencing on $4.50 a week,
and employed by the State in a Department that has a clean profit of
between $15,000,000 and $20,000,000." Mr. Steadman next contended that
a good conduct stripe--worth $13 a year--should be given every three
years; that the present period of five years was too long. Moreover,
the Department was altogether too rigorous in withholding good conduct
stripes for breaches of discipline. Mr. Steadman cited the following
instances to prove the necessity of an inquiry by Members of the House
of Commons into the discipline enforced by the Department. A man who
had served nine years as an auxiliary postman had been arrested on the
charge of stealing a postal money order. Though found not guilty by the
Court, he had been dismissed, without a certificate of good character.
Postman Taylor, of Stirling, after suffering an accident, was unable
to cover his route in the time fixed by the Post Office. Thereupon the
local postmaster had asked Taylor to retire on a pension. "The latest
information that I have in regard to that case is that the man who is
now doing Taylor's duties, in order to get through his round in the
time allotted, has his son to help him." Again, the annual increment
had been withheld from one Lacon, a telegraphist at Birmingham, and
the local Secretary of the Postal Telegraph Clerks' Association. The
Secretary to the Treasury, Mr. Hanbury, had told Mr. Steadman that the
Superintendent at Birmingham reported that Lacon's increment had been
withheld because Lacon had been insubordinate while on duty. Lacon
had told Mr. Steadman that he had been disciplined because of his
connection with the union. Mr. Steadman added: "I will not for one
moment attempt to stand up in the House and attack permanent officials
who are not able to defend themselves; it would be unmanly for me to do
so. But I do say that I have as much right to believe the statement of
Lacon, as the Right Honorable Gentleman [the Secretary to the Treasury]
has to believe the statement of the Birmingham Superintendent. There
is only one way of proving these cases, and that is for a Committee
of impartial Members of this House to be appointed before which the
permanent official can state his case and the men theirs. If that is
done, the Members, if their minds are unbiased, will very soon be able
to judge as to who is telling the truth."

[Sidenote: _Commons reminded of Civil Servants' votes_]

Sir Albert Rollit seconded Mr. Steadman's Motion, saying: "and we ought
not to overlook the fact, that, rightly or wrongly, these men now have
votes, and if they cannot obtain redress for their grievances here in
the House of Commons, they will try to obtain it from our masters, the
electorate."

Mr. R. W. Hanbury, Financial Secretary to the Treasury, and
representative in the House of Commons of the Postmaster General,
the Duke of Norfolk, "on principle" opposed the request for a Select
Committee. "Well, I say that the House of Commons is the last body
which ought to interfere in these questions of the payment of our
public servants. It is the last body which ought to be appealed to
as regularly as it is by civil servants to raise their salaries,
because that, after all, is the real object of this proposed committee.
Already I think the pressure brought to bear on individual Members,
and especially on Members who have a large number of civil servants
in their constituencies, has become perfectly intolerable, and civil
servants may depend upon it that it is the general opinion in this
House, although they may have their cause advocated by Members upon
whom they may be able to bring particular pressure, because large
numbers of them happen to live in the constituencies of those Members;
I repeat that they may depend upon it that in the opinion of the great
body of the Members of this House they are taking a highly irregular
course, and are in no way making their position more favorable in
the minds of the great majority of Members. Nothing will induce me
personally to agree to any committee such as has been suggested. And
while I object on principle, I object also because absolutely no
necessity has been shown for the committee.... The Duke of Norfolk and
I, because we were so desirous that no case of the slightest grievance
should be left untouched, inquired into every grievance which was
said to have been left unredressed by the Tweedmouth Committee....
Every Member of the House had a right to attend our [Norfolk-Hanbury
Committee] meetings, and to cross-examine the witnesses.... It is
the intention of the Post Office and of the Treasury to carry out
the recommendations of the Tweedmouth Committee to the very fullest
extent, and if the honorable Member [Mr. Steadman] is able to show me
any case whatever in which that has not been done, even in the case of
an individual postman, or sorter, or telegraphist, I will go into it
myself, and I will do more: I will promise that the grievance shall be
redressed."

Mr. Steadman's Motion was lost by a vote of 66 to 46. It was supported
by forty-one members of the Opposition and by four supporters of the
Government.[194]

* * * * *

On June 7, 1901, while the House of Commons was in Committee of Supply,
Mr. Thomas Bayley[195] asked for a Select Committee of the House of
Commons to investigate the grievance of the Post Office servants.[196]
He said: "This House shows a want of moral courage by throwing the
responsibility for redressing the grievance of the Post Office servants
on the other House [Lord Tweedmouth] or the permanent officials of any
Department whatsoever." Mr. Bayley had begun his political career as a
Town Councillor in Nottingham.

[Sidenote: _The Prime Minister's Anxiety_]

After many Members had supported the request for a Select Committee,
the Prime Minister, Mr. A. J. Balfour, said: "I have listened
with great interest to this debate, and, I confess frankly, with
considerable anxiety as to the future of the public service if
pressure of the kind which has been put upon the Government to-night
is persisted in by this House. This House is omnipotent. It can make
and unmake Governments. It can decide what, when, and how public money
is to be spent. But with that omnipotence I would venture to urge upon
Members their great responsibility with a subject like this. Everyone
knows that a great organized body like the Post Office Service has in
its power to put great pressure upon Members, but I earnestly urge upon
honorable Gentlemen that unless we take our courage in both hands, and
say that, although most desirous that all legitimate grievances shall
be dealt with, we cannot permit the Government as a great employer of
labor to have this kind of pressure put upon it, I think the future of
the public service is in peril. I assure the committee that I speak
with a great sense of responsibility. In this very case the Post Office
employees have brought forward their grievances year after year. Two
Commissions have been appointed, and no one ever ventured to impugn
the ability or impartiality of the members of those Commissions. These
Commissions made the fullest examination into the case put before
them, and reported at length, and as a consequence of that report the
British taxpayers are now paying $2,500,000 more of money than they
paid before.... In none of the speeches has any specific complaint
been brought forward, or any point urged which suggests the necessity
for further inquiry, but only the statement that there is a feeling
of uneasiness, and a desire for further examination, and that when
such a desire is expressed, the House should listen to it. We cannot
keep the Civil Service in a sound and healthy condition if we are
going to examine into it by a committee every five years. If the House
of Commons were to yield to the very natural temptation of granting
a committee such as had been asked for, though we might escape an
inconvenient division, we should be unworthy, in my opinion, of bearing
any longer the great responsibility of being the enormous employer
of labor that we are. We should not be carrying out our duty to the
public, and, worst of all, we should aim a blow at the Civil Service,
which is the boast of this country and the envy of the civilized
world, because we should become the parliamentary creatures of every
organized body of public servants who chose to use the great power
which the Constitution gives, for ends which I am sure they believe to
be right, but which this House could not yield to in the manner now
suggested without derogating from the high functions and spirit of pure
impartiality which the House must maintain if Members are to do their
duty by their constituents."

Mr. Bayley's Motion was lost by a vote of 148 to 103; it being
supported by ninety-one members of the Opposition and nine Government
supporters.[197]

* * * * *

[Sidenote: _Captain Norton demands a Select Committee_]

On April 18, 1902, while the House of Commons was in Committee of
Supply, Captain Norton[198] moved the reduction by $500 of the item:
Salaries and Working Expenses of the Post Office Telegraph Service:
$12,056,250.[199] He said: "The case briefly was this, that the
Government had been guilty of a distinct breach of faith in connection
with a certain number of worthy Government officials. He knew that
to make this statement of breach of faith was what must be called a
strong order, but he was prepared to prove that he was not exaggerating
in the smallest degree." He went on to state that the telegraphists
who entered the service in London in 1881 to 1891, when the Civil
Service Commissioners had advertised that entrants had "a prospect of
obtaining $950," had a contract with the Government that the possession
of "ordinary manipulative ability, with regular attendance and good
conduct" would insure advancement to a position paying $950. The
Government had broken that contract by prescribing, in 1892, that men
"must be equal to supervising duties" in order to be promoted to the
positions carrying $950.

Sir Albert Rollit[200] supported Captain Norton with the words: "For
a long time past there had been a very strong and general feeling in
the service that many of the men had been the victims of something
amounting almost to an imposition, however unintentional, on the part
of a public Department. Strong terms had been used in the course of the
debate, but he should endeavor to deal with the matter on the basis of
what he believed to have been a contract between those employees and
the Post Office. It was not difficult to show that that implied--or,
he might even say, express--contract had induced many to enter the
service, only to find that the contract was afterward departed from by
one of the contracting parties, the State."

Mr. Keir Hardie supported Captain Norton's Motion with the argument
that the concessions made by the Tweedmouth Committee had imposed no
additional burdens upon the taxpayers, for that committee merely had
allocated a small portion of the extra profit made by the Post Office
to the Post Office servants who made that profit. Mr. Keir Hardie at
one time has held the office of Chairman of the Independent Labor
Party,[201] an organization that brings to bear upon the British
municipal governments a pressure similar to that here shown to be
brought upon the House of Commons.

[Sidenote: _Members of Parliament coerced_]

Mr. Gibson Bowles said: "He was aware that many honorable Members who
brought forward the position of servants of the State, did so against
their own desires, because of the almost irresistible pressure placed
upon them by the servants of the State, who were at the same time
electors.... He supported the Secretary to the Treasury in resisting
this particular amendment, because it was one of many which tended to
illustrate a form of tyranny that was becoming unbearable, and which
tended seriously to injure the character of this House as making its
Members the advocates of classes, sections, and little communities,
instead of being trustees not for them alone, but for the whole
community."

Mr. Austen Chamberlain, Financial Secretary to the Treasury, and
representative in the House of Commons of the Postmaster General, the
Marquis of Londonderry, said he "supposed it would not be unfair to say
that an officer joining the British Army had a prospect of becoming
a field marshal." As to the telegraphists, "all that the Government
ever had held out to them was a prospect of a certain number of them
attaining something beyond the ordinary maximum" of $800, to which any
man could rise by the display of ordinary manipulative ability and the
observance of good conduct. Under Mr. Fawcett, in 1881 to 1884, one
telegraphist out of every 6.3 telegraphists had risen beyond $800. In
1890 the proportion in question had been exactly the same. In 1902, the
proportion was one in six, or, "practically the same."

Mr. Austen Chamberlain continued: "When I consider the great
concessions that were made [by the Tweedmouth Committee], and the great
burden that was placed upon the taxpayers, the care that was given to
that inquiry, and the opportunity that was afforded to every one to
have their grievances heard, I cannot pretend to think that a case has
been made out for trying, not fresh matters, but for retrying the same
matters and changing the tribunal, merely because all its decisions
[_i. e._, some of its decisions] were not agreeable to one of the
parties concerned. I hope the House will not do anything so fatal to
the efficiency and the organization of our Civil Service, as to allow
any large body of civil servants to think that they have only to be
importunate enough to secure in this House repeated inquiries into
their grievances, no matter what previous care has been given to their
consideration. I trust this House will have confidence in the desire
of the Postmaster General to deal fairly with all his employees, and
believe me when I say that there is nothing easier for us to do than to
give way; and that it is only because we believe it to be our duty to
the taxpayers that we find it necessary to refuse these recurring and
increasing demands."

Captain Norton's Motion was lost by a vote of 164 to 134. It was
supported by one hundred and twenty-three Opposition members, and by
seven Government supporters.[202]

A few hours later, Mr. Thomas Bayley[203] moved a reduction of $500 on
the salary of the Postmaster General, in order to call attention to
the grievances of the officials of the Post Office.[204] He said there
should be a Court of Appeal for the civil servants, and that Court
should be the House of Commons alone; whenever a dispute arose between
the Government of the day and its servants, the House should constitute
itself the Court of Appeal. Mr. Bayley added: "It had been distinctly
laid down that it was no part of the duty of the Post Office to make
a profit, but it should be worked for the future convenience of the
public and not reduced to the level of a mere profit making machine. It
was this desire on the part of the Post Office officials to make profit
which lay at the root of all the troubles which the House had been
discussing in the debate that evening."

Mr. Austen Chamberlain, Financial Secretary to the Treasury, and
representative, in the House of Commons, of the Postmaster General,
replied: "I refuse to resign one particle of my responsibility, or
to accept the suggestion that the Government should wash their hands
of their responsibility, and throw the subject, as an open question,
before the House of Commons, and ask a Committee of this House,
without aid or guidance from responsible Ministers, to judge upon
the multitude of conflicting interests and details incident to the
administration of so great a service as the Post Office. I, for one,
will not be party to putting off that responsibility on to the House
of Commons.... But we consider that it would be a grave dereliction
of duty on our part to throw this great service into the turmoil and
confusion of a Parliamentary inquiry, with the knowledge that such an
inquiry would not be final--honorable Gentlemen who have supported this
Amendment have declared that to talk about finality in this matter
is absurd--with the knowledge that what is done to-day for the Post
Office, must be done to-morrow for every other Department employing a
large number of Government servants, until elections to this House
will depend more and more on the willingness of Members to purchase
the support of those who are in public employment by promises of
concessions at the public expense, instead of securing their support,
like that of other citizens, on public grounds and national interests."

* * * * *

[Sidenote: _The Government's Compromise_]

On April 30, 1903, while the House was in Committee of Supply, Mr.
Austen Chamberlain, Postmaster General, prefaced the discussion
by the Committee of the Post Office Vote, with the following
statement:[205].... "The demand is that a Select Committee of this
House should be appointed to examine into the grievances of the Post
Office staff. I have made it my business since I have been at the post
office to see that every memorial from the staff dealing with their
grievances, addressed to me, should come before me personally....
Even though I have felt that many of the matters thus brought to my
notice were very small details of administration. I am determined
that an official [employee] of the Post Office, going to the head of
his service, should receive as fair and careful consideration of his
appeal, if he applies to me direct, as if he sought Parliamentary
influence to urge his claim. And I venture to think that nothing has
occurred during the time that I have been responsible which can
justify any servant of the Post Office in saying that he is unable,
except by Parliamentary influence, or by Parliamentary exposure, to
obtain the attention of the head of the Department. The other day at
the request of several Members on both sides of the House, I met the
Members themselves, and consented that if they wished, they should
be accompanied by members of the Post Office Staff, who should make
before them, and in my presence, a statement of the grounds on which
they asked for this inquiry by a Select Committee, in order that then
and there I might discuss it with my honorable friends. The Vote comes
on to-night, and I intend to take this opportunity of making a few
observations on the grounds for this Parliamentary inquiry as put forth
by the Staff. There are three main grounds alleged by the spokesman
for the staff for a Parliamentary inquiry--wages, sanitation [_i.
e._, the sanitary condition of certain offices], and meal reliefs, or
the time allowed out of working hours for taking refreshment. If a
person does eight hours' continuous work he is allowed half an hour
out of that time for a meal, reducing his actual working hours to
seven and a half hours.... I only wish to draw the attention of the
committee to what was described to me as a typical grievance by the
spokesman of a deputation which waited on me shortly before Christmas.
Certain men are on duty from 10 a. m. to 2 p. m., and from 4 p. m.
to 8 p. m., and complain because they are not allowed 20 minutes for
tea. In the judgment of any impartial person, was that a reasonable
grievance?... I myself have come to the conclusion, ... that while a
great number of the complaints made have no foundation in justice, and
that a great number of the men who think themselves aggrieved would
find it difficult to get, elsewhere than in the public service, such
good employment as they have now, there are other cases which are
open to improvement and for which further inquiry is needed to fix
exactly what should be done. The Government is unalterably opposed
to a Select Committee of the House of Commons for the decision of
this question. Honorable Members know, and it is no use blinking it,
the kind of pressure which is brought to bear, or is attempted to be
brought to bear, upon Members in all parts of the House by the public
servants, servants of the Post Office, I am afraid, especially, though
not entirely [exclusively], at election times. I have had Members come
to me, not from one side of the House alone, to seek from me, in my
position as Postmaster General, protection for them in the discharge
of their public duties against the pressure sought to be put upon them
by the employees of the Post Office. Even if the machinery by which
our Select Committees are appointed were such as would enable us to
secure a Select Committee composed of thoroughly impartial men who had
committed themselves by no expression of opinion, I still think that it
would not be fair to pick out fifteen Members of this House and make
them marked men for the purposes of such pressure as is now distributed
more or less over the whole Assembly. But if I am opposed to the
appointment of a House of Commons Committee for fixing wages in the
Post Office, I am still more opposed to thrusting upon it, or, indeed,
on any Committee, the duty of regulating in all its details the daily
administration and work of the Post Office. The wages paid are not
in all respects satisfactory, some are too low, others are too high.
Advice from men of practical and business experience would help me, the
Minister in this matter. Therefore, I propose to take such advice--of
men as free from any kind of political and electoral pressure, as they
should be free from any departmental influence. I should suggest a body
of five to report for my advice and information on the wages paid in
the Post Office Department to the four great classes of employees, the
letter sorters and the telegraphists in London, and the letter sorters
and the telegraphists in the provinces."

After reiterating that he proposed to get the advice of business men
only on the question of the scale of wages paid in the Post Office
Department, and that he in no way proposed to surrender to any
Committee of any sort the general duties of the Postmaster General,
Mr. Austen Chamberlain closed with the words: "I ask the Committee [of
Supply] to give me all the confidence it can, and when it is unable to
give me that confidence, I say that that is no reason for granting a
Select Committee to do my work, but only a reason for transferring the
office of Postmaster General to someone who is more competent."

Mr. Thomas Bayley replied that "he was not willing to give up the
rights and privileges of the House of Commons, whose duty it was
to remedy the grievances of the public service.... And although he
had been assured by those whom he represented [_i. e._, post office
servants] that the Post Office officials would loyally abide by the
decision of a Committee of the House of Commons, the Right Honorable
Gentleman [the Postmaster General] could not expect the same loyalty
with regard to the decision of the Committee he proposed to appoint."

Sir Albert Rollit said: "The Tweedmouth Committee was a one-sided
tribunal; the officials were represented on it, but the men not at
all...."

Captain Norton replied: "The Right Honorable Gentleman had also
referred to the question of Members on both sides of the House coming
to him for protection. That was very startling, because the reason
they were there at all was that they might represent every section of
their constituents,[206] ... but presuming the Post Office servants
were organized, he submitted they were within their rights to appeal
to their Members.... If the postal officials were such terrible tyrants
he hoped they would take note that they could never hope for fair
play from the present Government. The Right Honorable Gentleman had
appointed a packed jury of five individuals to deal with a fraction of
the question.... In other words, he was going to take shelter behind
this bogus committee.... He was going to appoint five Members, possibly
sweaters, to determine the rate of wages.... It would be astounding if
the postal officials accepted any such bogus arbitration. If it was
to be a Board of Arbitration, why should not they have five postal
servants added to the five employers of labor?" Captain Norton is a
Junior Lord of the Treasury in the present Sir Henry Campbell-Bannerman
Ministry.

* * * * *

On May 17, 1903, the National Joint Committee of the Postal Association
unanimously resolved: "That this National Joint Committee views
with extreme dissatisfaction the appointment of a Court of Inquiry
which is not composed of members of Parliament, but is an altogether
irresponsible body, and protests against the scope of the inquiry
being limited to a single grievance and to a minority of the Staff. It
pledges itself to continue to use every legitimate endeavor to obtain
an impartial Parliamentary Committee of Inquiry into the causes of
discontent in the postal and telegraph service."[207]

In August, 1903, the Postmaster General appointed a "Committee to
inquire into the adequacy of the wages paid to certain classes of the
postal servants." The Committee consisted of: Sir Edward Bradford,
until lately Chief Commissioner of the Metropolitan Police; Mr. Charles
Booth, a Liverpool Merchant, and the author of "The Life and Labor of
the People in London;" Mr. Samuel Fay, General Manager of the Great
Central Railway; Mr. Thomas Brodrick, Secretary of the Co-operative
Wholesale Society, Manchester; and Mr. R. Burbridge, Managing Director
of Harrod's Stores.[208]

FOOTNOTES:

[182] _Who's Who_, 1903, Woods, Sam'l., M. P. for S. W. Lancashire,
1892 to 1895; M. P. (R.) for Walthamstow, Essex, 1897 to 1900;
President of Lancashire Miners' Federation; Vice-President of Miners'
Federation of Great Britain; Secretary of Trade Union Congress since
1894.

[183] _Hansard's Parliamentary Debates_, February 18, 1898, p. 1,107
and following.

[184] Compare also _Hansard's Parliamentary Debates_, April 22,
1874, p. 958 and following, and June 1, 1874, p. 797 and following.
_Parliamentary Papers_, 1874, vol. IV: A Bill to Relieve Revenue
Officers from remaining Electoral Disabilities; and 37 and 38 Victoriæ,
c. 22: An Act to Relieve Revenue Officers from remaining Electoral
Disabilities.

[185] Ayes Noes
Conservatives } Government 2 132
Liberal Unionists } Supporters 1 27
Liberals } The 48 3
Nationalists } Opposition 32 0
Various factions 3 1
-- ---
86 163

[186] _Who's Who_, 1903, Steadman, W. C., M. P. (R.) Stepney, Tower
Hamlets, 1898 to 1900--returned by a majority of twenty, defeated 1900;
stood for Parliament, Mid-Kent, defeated, 1892; Hammersmith, defeated,
1895. Is Secretary Barge Builders' Trade Union.

[187] _Hansard's Parliamentary Debates_, February 20, 1899; p. 1,523
and following.

[188] Ayes Noes
Conservatives } Government 1 129
Liberal Unionists } Supporters 1 28
Liberals } The 67 2
Nationalists } Opposition 19 0
Various factions 3 0
-- ---
91 159

[189] _Hansard's Parliamentary Debates_, June 1, 1899, p. 99 and
following.

[190] _Who's Who_, 1903, Norton, C. W., M. P. (L.) W. Newington,
London, since 1892. Late Captain 5th Royal Irish Lancers, ... some
years in India; selected to report upon Italian Cavalry, 1880;
Brigade-Major of Cavalry, Aldershot, 1881-82. In 1906 Captain Norton
was made a Junior Lord of the Treasury in the Campbell-Bannerman
Liberal Government.

[191] _Who's Who_, 1903, Maddison, F., M. P., Sheffield, Brightside
Division, 1897 to 1900. Three years Chairman of the Hull Branch of
Typographical Association; first Labor Member of the Hull Corporation;
offered post of Labor Correspondent to the Board of Trade in 1893;
Editor of the _Railway Review_, official organ of the Amalgamated
Society of Railway Servants (resigned, 1897); Ex-President of the Labor
Association for Promoting Co-operative Production.

[192] Ayes Noes
Conservatives } Government 5 133
Liberal Unionists } Supporters 4 21
Liberals } The 83 2
Nationalists } Opposition 14 0
Various factions 1 1
--- ---
107 157

[193] _Hansard's Parliamentary Debates_, April 27, 1900, p. 199 and
following.

[194] Ayes Noes
Conservatives } Government 4 55
Liberal Unionists } Supporters 0 9
Liberals } The 40 0
Nationalists } Opposition 1 0
Various factions 1 2
--- ---
46 66

[195] _Who's Who_, 1903, Bayley, Thos., J. P., M. P. (L) Chesterfield
Division, Derbyshire, since 1892. Many years on Nottingham Town
Council; Alderman, Nottingham County Council; contested Barkston Ash
Division of Yorkshire, 1885; Chesterfield, 1886.

[196] _Hansard's Parliamentary Debates_, June 7, 1901, p. 1,358 and
following.

[197] Ayes Noes
Conservatives } Government 8 120
Liberal Unionists } Supporters 1 25
Liberals } The 57 0
Nationalists } Opposition 34 0
Various factions 3 3
--- ---
103 148

[198] _Who's Who_, 1905, Norton, C. W., M. P. (L.) West Newington
(London), since 1892; late Captain 5th Royal Irish Lancers; selected to
report upon Italian Cavalry, 1880; Brigade-Major of Cavalry, Aldershot,
1881-82. In 1906 Captain Norton was made a Junior Lord of the Treasury
in the Campbell-Bannerman Liberal Government.

[199] _Hansard's Parliamentary Debates_, April 18, 1902, p. 660 and
following.

[200] _Who's Who_, 1904. Rollit, Sir Albert Kaye, J. P., LL. D., D.
C. L., D. L., M. P., Islington, since 1886. Partner in Bailey and
Leetham, steamship owners; Director of National Telephone Co.; Mayor
of Hull 1883 to 1885; President of Associated Chambers of Commerce of
the United Kingdom, 1890 to 1896; President London Chambers of Commerce
1893 to 1898; Chairman Inspection Committee, Trustee Savings Bank since
1890; President Municipal Corporations' Association.

[201] _Who's Who_, 1905.

[202] Ayes Noes
Conservatives } Government 6 127
Liberal Unionists } Supporters 1 31
Liberals } The 72 4
Nationalists } Opposition 51 0
Various factions 4 2
--- ---
134 164

[203] _Who's Who_, 1905, Bayley, Thos., J. P., M. P. (L.), Chesterfield
Division Derbyshire since 1892; many years on Nottingham Town Council.

[204] _Hansard's Parliamentary Debates_, April 18, 1902, p. 706 and
following.

[205] _Hansard's Parliamentary Debates_, April 30, 1903, p. 1,015 and
following, and May 11, p. 313 and following.

[206] According to _The Times_, May 11, 1903, Captain Norton said: "The
Right Honorable Gentleman had told a startling story of how Members on
both sides of the House had appealed to him to protect them from the
postal servants. Members of the House represented all sections in their
constituencies and surely postal servants as voters had the right to
approach their representatives, and apply the same kind of pressure
that other organized bodies applied."

[207] _The Times_, May 18, 1903.

[208] _The Times_, August 14, 1903.

CHAPTER XII

THE BRADFORD COMMITTEE REPORT

In the preceding chapter it was stated that the Government in August,
1903, appointed Sir Edward Bradford, Mr. Charles Booth, Mr. Thomas
Brodrick, Mr. R. Burbidge, and Mr. Samuel Fay a Committee "to inquire
into the scales of pay received by the undermentioned classes of
Established Post Office Servants, and to report whether, having regard
to the conditions of their employment and to the rates current in other
occupations, the remuneration of (a) Postmen, (b) Sorters (London),
(c) Telegraphists (London), (d) Sorting Clerks and Telegraphists
(Provincial) is adequate." No further question was submitted to the
Committee.

The Committee, in May, 1904, reported: "We have not seen our way to
obtain any specific evidence as to the comparative rates of wages
current in other occupations. So far as regards this portion of the
reference to us,[209] we came to the conclusion that no really useful
purpose would be served by asking employers of labor to furnish precise
details of the wages paid by them. Certain official information is
already available, being obtained and published from time to time
by the Board of Trade. This information, supplemented by our own
experience, affords more reliable data than any particulars we could
hope to obtain in the way of evidence within the limits of an inquiry
of reasonable duration."

[Sidenote: _Business Methods not applicable in State Service_]

"Moreover, it is difficult to make any valid comparison between a
National Postal Service and any form of private industrial employment,
the entire conditions being necessarily so different; payment by
results and promotion or dismissal according to the will of the
employer being inapplicable if not impossible under the State."[210]

The Committee's report covers nineteen pages, but only these two
paragraphs are in answer to the reference given to the Committee. In
them the Committee reports its failure; and with that report of failure
the Committee should have contented itself, under all of the rules
of procedure governing Committees and Commissions appointed by the
British Government. But the Committee ignored the established rules of
procedure, roamed about at will, and reopened many of the questions
settled by the Tweedmouth Committee, which had sat two years, and had
taken upward of a thousand closely printed folio pages of evidence.
The Bradford Committee did this in violation of the established usage
of the country, as well as in spite of the fact that Mr. Austen
Chamberlain, Postmaster General, had closed the speech in which he
announced his resolve to appoint the Committee, with the words that he
wanted advice on the question of comparative wages only and that he
refused to transfer to "any Committee the duty of regulating in all its
details the daily administration and work of the Post Office."

Upon the Report of the Committee, _The Economist_[211] (London)
commented as follows: "This Committee was asked to compare the wages
of Post Office servants with those paid for corresponding work
outside. Their answer was, in effect, that no such comparison could
be instituted. Why, when postal servants are taken from various
ascertained classes [of society], it should be impossible to compare
their pay with that ordinarily received by the same classes in other
employments is not obvious. What is obvious is that the Committee
either mistook the inquiry entrusted to them, or did not choose to
enter upon it."

_The Times_[212] said: "The reference here is explicit, ...
The specific question they were asked was the question to which, as
our Correspondent says, the taxpayer really wants an answer--namely,
are postal servants fairly paid ...? This question the Committee has
neither answered nor attempted to answer. Passing by the terms of
reference altogether, the Report declares that 'it is difficult'....
But, as an answer to the specific question addressed to the Committee;
it is, in our judgment, in the literal sense of the word, impertinent.
However, having rejected the criterion propounded to them by the
Postmaster General, the Committee proposed to apply a criterion of
their own...." The Committee made some general statements as to the
rates of wages that should prevail in the public service. They were:
"We think that Postal employees are justified in resting their claims
to remuneration on the responsible and exacting[213] character of the
duties performed and on the social position they fill as servants of
the State. The State, for its part, does right in taking an independent
course guided by principles of its own, irrespective of what others may
do; neither following an example nor pretending to set one. It must
always be remembered that in the working of a monopoly by the State,
the interest of the public as a whole is the paramount consideration,
and every economy consistent with efficiency must be adopted. The terms
offered by the State should, however, be such as to secure men and
women of the requisite character and capacity and ought to be such as
will insure the response of hearty service." If one seeks to find in
the foregoing statements an answer to the very matter-of-fact question
whether the postal servants' wages are too high or too low, compared
with wages in outside employment, he will have to conclude, with _Alice
in Wonderland_, that "it seems very pretty, but it's rather hard to
understand; somehow it seems to fill my head with ideas, only I don't
know exactly what they are."

The Committee concluded with the statement that the adequacy of the
wages obtaining among the postal employees could be tested by the
numbers and character of those who offered themselves; by the capacity
they showed on trial; and finally, by their contentment. It found that
there was no lack of suitable candidates; that there was no complaint
as to their capacity; but that there was widespread discontent. It
added that the Tweedmouth and Norfolk-Hanbury settlements did not
give satisfaction at the time; and that that dissatisfaction had been
"aggravated by the general rise in wages and prices and in the standard
of life which took place to some extent even during the two years
occupied by the Tweedmouth inquiry (1895 and 1896) and had continued
since, culminating, however, in 1900, since when there has been some
slight reaction. The same period has seen a great development of Postal
and Telegraph business, causing greater pressure of work. This has been
combined with lower charges to the public and a considerable increase
in Postal Revenue. We therefore consider there is a just claim for
revision."

Taking these statements in their order, one finds, first of all,
that the Committee took no evidence on the question how Post Office
wages had compared with wages in outside employment previous to the
rise in wages and prices in the period from 1895 to 1900, nor on the
question of the rise in wages in the Post Office Service in 1896
to 1900, compared with the rise in wages in outside employment and
in prices in 1895 to 1900. The first statement of the Committee,
therefore, was supported by no evidence, it was a mere assertion. The
second statement, namely, that the growth of the Postal and Telegraph
business had caused greater pressure of work, also was not supported
by evidence. On the other hand, it was absolutely essential that such
a statement should be supported by evidence, because it is a fact that
in both branches of the Postal Service the policy obtains of having so
large a body of employees "that the maximum of work, as a rule, can be
dealt with without undue pressure."[214] As to the Post Office having
lowered its charges to the public in the period from 1895 to 1900, it
is to be said, first, that it does not follow therefrom that wages
should be raised; and second, that the penny rate on domestic letters
was not lowered, and that the carriage of penny letters is the only
work upon which the Post Office makes a profit.[215] Finally, as to
the statement that there had been, in 1895 to 1904, "a considerable
increase in Postal Revenue," the facts are, first, that the net
revenue of the Post Office as a whole increased from $14,640,000 in
1895, to $18,166,000 in 1896, and to $18,781,000 in 1897; but that
in the subsequent years, 1898 to 1904, it did not again reach the
high-water mark of 1897, and averaged $17,642,000. Second, that in the
period, from 1895 to 1904, the Telegraph Branch did not earn operating
expenses, the expenses on account of wages and salaries having risen
from 11.9 cents per telegram in 1897, to 13.7 cents in 1904. That is a
matter of importance, for the recommendations of the Committee extended
to the Telegraph Branch as well as to the Postal Branch proper.
Again, the Committee had stated that "in the working of a monopoly
by the State, the interest of the public as a whole is the paramount
consideration, and every economy consistent with efficiency must be
adopted." In the 20 years ending with 1903, the proportion of the Post
Office's gross revenue available for defraying the general expenses of
the State had declined steadily from 33 per cent. to 20 per cent.[216]
Still, again, in the year 1903, the expenses of the Post Office had
been increased by $3,000,000 through the Tweedmouth and Norfolk-Hanbury
settlements.[217] In the face of those facts, the Bradford Committee
made recommendations that Lord Stanley, Postmaster General, said
would cost $6,500,000 a year.[218] The Bradford Committee sought to
justify its recommendations with the simple statement that there
was "widespread discontent" among the Postal employees. The Postal
employees themselves had made demands before the Committee that would
have called for the expenditure of an additional $12,500,000 a year.
Their attitude to the Committee's amiable proposal to conciliate them
by giving them $6,500,000 a year, is shown in the subjoined extract
from the official organ of the telegraph staff. "It is perfectly plain,
... that the recommendations of the Committee, well-meaning as we
frankly admit them to be, cannot be accepted as a full settlement of
the case of the Post Office workers, or as one carrying with it the
character of finality. They can only be accepted as an instalment of a
long overdue account; and Postal Telegraphists, even if they have to
fight alone for their own hand in the future as they did for many long
years in the past, will combine for the payment of the balance."[219]

That a body of five men, of whom four were respectively a Liverpool
merchant and ship owner, a general manager of a railway, a manager
of a large wholesale coöperative society, and a manager of a large
department store, could make a Report such as the foregoing one,
affords a melancholy illustration of the fact that no matter how far
popular governments may go in assuming the conduct of great business
enterprises, they never will succeed in creating a public opinion that
will sustain them in their efforts to conduct their business ventures
on the commonly accepted principles of the business world.

* * * * *

In the House of Commons, Lord Stanley, the Postmaster General,
said: "As to the Committee's Report, it did not comply with the
reference, because no comparison was made with the rates of pay in
other occupations ... but they conclude that as there was discontent
there ought to be an increase of wages. That was a direct premium
on discontent, a direct encouragement to the employees to say among
themselves that if they were to be discontented and to agitate, they
would get more in the future. The Committee, on the other hand, went
outside the reference, because they proposed a complete reorganization
of the Post Office, including overseers, who were not referred to in
the reference. On this particular subject they took no evidence....
Since the employees of the Post Office had said in a circular: 'We
wish to make it perfectly clear that we do not regard the Committee
as in any sense an arbitration board,' that was rather against the
argument that the Report ought to be accepted as an arbitration award.
He did not complain of the ordinary circulars of the employees [sent
to Members of Parliament], but he did object to one circular [sent to
every Member of the House of Commons], at the bottom of which was a
paragraph, which could be torn off, for Members to sign [and mail to
the Postmaster General], informing him [the Postmaster General] that
he ought to do this or that.[220] That [circular] he [Lord Stanley]
would not receive.... Coming to the main question, he thought it was
obvious that it was impossible for either side when in power to go on
for long being swayed in all these questions of increases of wages by
any pressure, political or otherwise, that might be put upon them.
[Cheers.] The Post Office was not the only party concerned. There was
not a class employed by the Government, who, if it saw another class
getting an increase of wages by agitation, would not try the same
method. He supported cordially the suggestion which had been made in
the debate that all questions of pay of employees of the Government
should not be referred to the House, but referred to some judicial body
on whom no outside influence could be brought to bear, who would look
at the matter in dispute as between employer and employee with the
object of giving to the employee the wages which in the open market
a good employer would give, while at the same time protecting the
master--in this case the State--from any outside influence."[221] In
conclusion, Lord Stanley made the statement that the adoption of the
Committee's Report would cost "well over $5,000,000 a year."

Sir Albert Rollit acted as the spokesman of the Postal employees. He
is a Solicitor in Mincing Lane and at Hull; a steamship owner at Hull,
Newcastle and London; and a Director in the National Telephone Company,
which pays its employees materially less than the Post Office pays
the employees of the Post Office Telephone system.[222] He has been
President of the Associated Chambers of Commerce of the United Kingdom,
as well as of the London and Hull Chambers of Commerce. He was Mayor
of Hull from 1883 to 1885; and for several years past he has been the
President of the Association of Municipal Corporations. Sir Albert
K. Rollit was not re-elected to Parliament in the General Election
of January, 1906; and in the following March, the Postal Telegraph
Clerks' Association passed a resolution "expressing appreciation of
the services rendered to the Postal movement in and out of Parliament
by Sir Albert K. Rollit, and regret that they were no longer able to
command his championship in the House of Commons."[223]

After the Balfour Government had rejected the Report of the Bradford
Committee, in the interest of the taxpayers, Lord Stanley, Postmaster
General, instituted "a careful comparison between Post Office
wages and those current in other employments; and, as the result
of the comparison, he felt justified in recommending to the Lords
Commissioners of His Majesty's Treasury certain improvements of pay"
aggregating $1,861,500 a year.[224] The improvements of pay were
granted to sorters, telegraphists, sorting clerks and telegraphists,
postmen, assistant and auxiliary postmen, and various smaller classes
throughout the United Kingdom.

FOOTNOTES:

[209] There was no reference but that one.

[210] _Report and Appendices of the Committee appointed to inquire into
Post Office Wages_, 1904.

[211] September 17, 1904.

[212] September 12, 1904.

[213] _Report of the Bradford Committee on Post Office Wages_, 1904, p.
198.

Dr. A. H. Wilson, Chief Medical Officer of the Post Office, testified:
"When cases of breakdown have been brought to my notice I have
invariably found the primary origin of the illness to have been due
to causes outside Post Office life. These causes are generally drink,
financial worry, domestic troubles, etc."

[214] Compare Chapter XI, testimony of Mr. Kerry.

[215] _Hansard's Parliamentary Debates_, April 27, 1900, pp. 229 and
136; Mr. R. W. Hanbury, Financial Secretary to the Treasury.

[216] _Hansard's Parliamentary Debates_, May 11, p. 342; Mr. Austen
Chamberlain, Postmaster General.

[217] _Hansard's Parliamentary Debates_, April 20, 1903, p. 1,022; Mr.
Austen Chamberlain, Postmaster General.

[218] _Hansard's Parliamentary Debates_, July 6, 1905, p. 1,390; Lord
Stanley.

[219] _The Times_, September 17, 1904: Correspondence.

[220] _The Times_, September 12, 1904, denominated this episode "a
melancholy and even ominous illustration of the process of democratic
degeneration." In the same issue Mr. S. W. Belderson writes that 130
Members of the House signed the paragraph in question.

[221] _The Times_, August 10, 1904.

[222] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 13,804; Mr. S. Walpole, Permanent Secretary
of the Post Office.

[223] _The Times_, March 17, 1906; and _Who's Who_, 1905.

[224] _Fifty-first Report of the Postmaster General_, 1905.

CHAPTER XIII

THE HOUSE OF COMMONS SELECT COMMITTEE ON POST OFFICE SERVANTS, 1906

The Post Office Civil Servants' Unions demand the adoption
of the Bradford Committee Report. Lord Stanley, Postmaster
General, applies the words "blackmail" and "blood-sucking"
to the postal employees' methods. Captain Norton moves for a
House of Commons Select Committee. Mr. Austen Chamberlain,
Chancellor of the Exchequer, in vain asks the Opposition
Party's support for a Select Committee to which shall be
referred the question of the feasibility of establishing a
permanent, non-political Commission which shall establish
general principles for settling disputes between the Civil
Servants and the Government of the day. Captain Norton's
Motion is lost, nine Ministerial supporters voting for it, and
only two Opposition members voting against it. Mr. J. Henniker
Heaton's appeal to the British public for "An End to Political
Patronage." The Post Office employees, in the campaign
preceding the General Election of January, 1906, induce nearly
450 of the 670 parliamentary candidates who succeeded in being
elected, to pledge themselves to vote for a House of Commons
Select Committee on Post Office Wages. Immediately upon the
opening of Parliament, the Sir H. Campbell-Bannerman Liberal
Ministry gives the Post Office employees a House of Commons
Select Committee.

On September 17, 1904, the Postal Telegraph Clerks' Association
unanimously resolved: "That this Conference expresses its indignation
that the Postmaster General, having appointed a Committee of his own
choosing to inquire into the Post Office wages ... now, for no good
reason, has rejected the Report. This Conference, therefore, calls upon
the Postmaster General to adopt immediately, as dated from May 9, 1904,
the whole of the ameliorative recommendations contained in the Bradford
Committee's Report; but the Postal Telegraph Clerks' Association
reserves to itself the right to object to, and protest against, any
recommendations which may be considered by this Association to be of a
restrictive and retrograde character."[225]

[Sidenote: _A Merchant in Politics_]

In the evening of the same day a mass meeting was addressed by Mr. W.
W. Rutherford, M. P., the head of the firm of Miller, Peel, Hughes and
Rutherford, Liverpool. Mr. Rutherford had been Lord Mayor of Liverpool
in 1902. He said: "He ventured to think that the great Postal and
Telegraph Service was suffering because its position and its grievances
had not been made thoroughly intelligible to the general public....
That was not a matter touching a few hundreds of people in a hole and
corner of the country, but was one of extreme importance affecting no
less than 185,000 people.... The real foes of the employees were the
highly paid officials at the head of the Department, who were quite
content to draw their salaries and show that the Government was making
four or five million pounds sterling[226] out of the public and the
Postal Service."

Mr. Rutherford's speech recalls to mind the fact that the Australian
cousins of the British civil servants have learned to deal with their
"foes" by compelling the popular branches of the Australian Parliaments
to reduce the salaries of offensive officials, or to drive them out of
the Service by means of "fishing" Parliamentary Committees, appointed
to report on--and to condemn--the offending officials.

On August 14, 1904, the London Branch of the Postal Telegraph Clerks'
Association held a meeting, at which Mr. C. H. Garland,[227] the
Secretary, spoke of Mr. Thomas Bayley, M. P., as one who "had rendered
valuable service to their cause in the House of Commons." The presiding
officer, Mr. R. H. Davis, said: "In burking the recommendations of the
Committee they could not help feeling that the Post Office authorities
had been guilty of a breach of faith. Were they going to take the
rebuff lying down? The London Committee were determined to fight the
matter harder than ever. By the time Parliament assembled next year,
they would have an effective organization at their disposal, and the
enemy would feel their pressure very considerably."[228]

The Special Conference of the Postal Telegraph Clerks' Association
held on September 17, 1904, resolved to hold mass meetings in all the
district centres between then and next February [opening of Parliament]
to protest against the action of the Postmaster General. The series to
conclude with a "monster" demonstration in London immediately before
the opening of Parliament.[229]

* * * * *

On July 6, 1905, while the House of Commons was in Committee of Supply,
and was considering the vote upon the Post Office, there was a long
and instructive debate upon the Report of the Bradford Committee.[230]
Lord Stanley, Postmaster General, opened the debate with a quotation
from _The Post_,[231] the Post Office employees' organ. The statement
quoted read: "Not only do we object to the composition of the
[Bradford] Committee, but we take the strongest exception to its terms
of reference. The inquiry as to whether our wages are adequate or
otherwise becomes a farce if their adequacy is to be judged by the
standard of wages of the open labor market. No such comparison would be
reasonable or fair. There is no other employer who fixes his own prices
or makes an annual profit of $20,000,000. There is no other class of
work which can be compared to the Post Office work, neither any other
employee who can be compared with the Post Office servants.... Surely
Mr. Chamberlain does not think we should regard such an inquiry as
final. If he does, the sooner his mind is disabused the better." Lord
Stanley next discussed the manner in which the Bradford Committee
had made recommendations which were based on no evidence whatever.
For instance, in order to improve the chances of promotion, the
Committee had recommended the creation of additional higher posts--"for
which there was no work." In one Department of the Post Office that
recommendation would mean the increase in the number of overseers from
250 to 900. Lord Stanley next made lengthy comparisons between the
wages received by letter sorters and telegraphists on the one hand,
and employees of equal intelligence and attainments in the service
of private companies on the other hand. He showed that in London the
maximum wage of the sorters and telegraphists was equal to the salary
of the "non-college-trained certified teacher," and that in such
provincial cities as Hull, Swansea and Exeter it was larger. "The only
comparison which was not entirely upon his [the Postmaster General's]
side was that with the clerks in the cable companies, who were paid
more than the Post Office cable room operators. But the work of the
cable companies' operators was more arduous, and there was liability
to be sent abroad at any moment. But he had granted the Post Office
cable room operators an increase of pay." He added that the ultimate
aggregate cost of the increases in pay made since the publication of
the Bradford Committee's Report would be $642,000 a year.[232]

[Sidenote: _The Postmaster General applies the Terms "Blackmail" and
"Blood-sucking"_]

Lord Stanley, Postmaster General, concluded as follows: "But he would
ask the House just to consider what was going to be the end of all
these demands. This was really a question worthy of consideration on
both sides of the House. What were the demands on the public purse
for this particular office? It would be within the recollection of
the Committee of Supply that at a deputation to his Right Honorable
Friend and himself, one of the men stated that he thought the whole
of the $20,000,000 profit, as he regarded it, made by the Post Office
employees, ought to be devoted to the payment of those employees ...
that man made a deliberate statement, not on his own account, but as
representing a particular section or organization in the Department.
It was repudiated by others present".... Lord Stanley next stated that
the demands made by the Post Office employees before the Bradford
Committee would have called for $12,500,000 a year. He continued:
"Honorable Members knew better than he how they were being bombarded
with applications from Post Office employees and other classes of Civil
Servants for increases of wages. This had taken a form which was not
illegal, but which he could not help thinking was an abuse of their
rights, to wit, the form of a political threat. They had circulated
an appeal in which they expressed very clearly and very frankly
their intention, and it was one of which the Committee would have to
take note now, or it would be much worse in the future. They said:
'Two-thirds at least of one political party are in great fear of losing
their seats. The swing of the pendulum is against them, and any Member
who receives 40 or 50 such letters will under present circumstances
have to consider very seriously whether on this question he can afford
to go into the wrong lobby. This is taking advantage of the political
situation.' It was indeed, but it was abusing, as it seemed to him,
their rights as voters. It was nothing more nor less than blackmail.
It was nothing more nor less than asking Members to purchase votes for
themselves at the General Election[233] at the expense of the Public
Exchequer. Both sides would have to make up their minds that some
means should be devised by which there should not be this continual
blood-sucking on the part of the public servants."

[Sidenote: _A permanent non-political Tribunal suggested_]

"How it was to be done, was not for him to say, but he had suggested,
and he still thought that there would have to be some organization
outside party politics altogether, and unconnected with and unmoved by
Parliament and political considerations, to whom such questions should
be referred and by whom an impartial opinion should be given.... He
wanted now rather to anticipate a request that would probably be made
by Honorable Members opposite--that he should appoint a Parliamentary
Committee. To that request he would have to give a negative reply, and
he would say why. First, too great political pressure would be brought
to bear on the Committee; second, the whole case of the Post Office
employees was before the House in the evidence taken by the Bradford
Committee, and everybody could make up his mind as well as he would be
able to if appointed to a Select Committee. Third, he would not throw
the responsibility on to a Committee; it was his place to bear it
himself."

On July 18, Lord Stanley, Postmaster General, stated that he
would neither withdraw nor modify the epithets "blackmail" and
"blood-sucking" which he had used. He stated that those epithets
applied "only to those who by speeches, letters or circulars, attempt
unduly to influence the votes of Honorable Members with regard to the
questions affecting Post Office wages, and to those who associate
themselves with such action."[234]

[Sidenote: _Captain Norton on Civil Service Agitation_]

After the Postmaster General had spoken, Captain Norton moved a
reduction of the Post Office Vote, for the purpose of drawing attention
to the grievances of long standing of the Post Office employees. He
said: "As regarded what had been said about undue influence, his
contention was that so long as the Postal officials, or should he say
the members of the Civil Service, and for that matter the members
of the fighting services were allowed to maintain a vote, they had
precisely the same rights as all other voters in the country to
exercise their fullest influence in the defense of their rights,
privileges and interests. He might mention that all classes of
all communities, all professions, all trades, all combinations of
individuals, such as anti-vaccinationists and so forth, had invariably
used their utmost pressure in defense of their interests and views upon
Members of the House...."[235]

Sir Albert K. Rollit supported Captain Norton's motion.

[Sidenote: _Chancellor of the Exchequer asks for non-Party Vote_]

The Chancellor of the Exchequer, Mr. Austen Chamberlain, spoke as
follows: "The question at issue was not one between the two political
parties. It was above parties. It was whether there was to be good
economical government in the country at all, or whether the Civil
Servants in the employment of the Crown could make such use of their
votes, as citizens, for the purely selfish purpose of forcing the
public to pay more for their services and so increase the expenditure
of a great Department of State. He did not know how long they could
go on in the position they had now reached, under which pressure
was brought to bear on Honorable Members of all parties by their
constituents. He was certain that if any scheme could be devised ...
so that they might take this question altogether out of the region of
political life--not merely out of party life, but out of Parliamentary
life--it would be a great advantage. It would tend to preserve the
Civil Service free from that political influence and independent
of the changing fortunes of party which had been their great boast
and security in the past. If there were a general feeling in the
House that an object of that kind was one on which all parties might
well coöperate, then His Majesty's Government, while maintaining as
resolutely as they had in past years their objection to referring these
specific grievances to a Select Committee appointed in the ordinary
way for that particular purpose, would be prepared to assent to the
appointment of a Committee of this House to consider the state of
affairs which had arisen; to see if they could devise some remedy for
it; to lay down the principles by which they should be governed in
these matters; and to advise whether it would be possible to establish
some permanent body or Commission, outside the sphere of electoral
pressure and above and beyond any of our party conflicts, which might
advise the Government in applying those principles to particular cases.
Such a Committee could, of course, only be successfully conceded with
the good will of all parties in the House, and if the whole House were
animated by a desire, if possible, to set this question at rest. With
that good-will, he thought, it might serve a useful purpose. The object
to be attained was of such vast importance that he, for one, would not
refuse any method by which they might hope successfully to compass it
and to maintain the Civil Service in that high position of which, with
its great traditions, they had such just cause to be proud and such
good reason to be grateful for."[236]

Captain Norton's motion was lost by a vote of 249 to 205. The House
divided on party lines, only two Members of the Opposition voting with
the Government, and only nine supporters of the Government voting
with the Opposition.[237] Of the Members of the Opposition who voted
in support of Captain Norton's motion, two shortly afterward became
members of the Cabinet in Sir Henry Campbell-Bannerman's Liberal
Ministry, and fifteen others became members of the Ministry, but not of
the Cabinet, or inner circle.[238]

Captain Norton himself became one of the four Junior Lords of the
Treasury. The latter functionaries "are expected to gather the greatest
number of their own party into every division [of the House of
Commons], and by persuasion, promises, explanation, and every available
expedient, to bring their men from all quarters to the aid of the
Government upon any emergency. It is also their business to conciliate
the discontented and doubtful among the ministerial supporters, and to
keep every one, as far as possible, in good humor."[239]

* * * * *

In _The Nineteenth Century and After_, for April, 1906, Mr. J.
H. Heaton, in an article entitled: _Wanted! An End to Political
Patronage_, discussed at length some of the after effects of the
memorable debate of July 6, 1905. Mr. Heaton had been returned to
Parliament from Canterbury in 1885, 1886, 1892, 1895, and 1900; the
last four occasions as an unopposed candidate. He had carried the
Imperial Penny Postage Scheme in 1888; he had introduced telegraph
money orders in England; the parcel post to France, etc.; and the
freedom of the City of London in a gold casket had been conferred on
him in 1899.

[Sidenote: _A Prime Minister on the Civil Service_]

Mr. Heaton opened his article with the statement: "Many years ago a
great Prime Minister wrote to me as follows: 'There can be no doubt
that the organized attempts of servants of the State to use their
political influence at the cost of the taxpayer is likely to become
a serious danger. I agree with you in thinking that it can only be
effectually met by agreement between the two sides of the House.'"
Mr. Heaton continued: "The Civil Servants of the Crown are, taken as
a whole, an admirable and efficient body of workers, of whom England
is justifiably proud, and whom--as was held, I think, by the late
Mr. Gladstone--she rewards on a generous scale.... It is the more
to be regretted that large classes of them should have fallen into
the hands of agitators, who incite to the systematic intimidation of
Members of Parliament with a view to the extortion of larger and larger
votes [appropriations] for salaries. This evil is rapidly becoming
formidable.... Any official raising the cry of 'higher wages' is sure
of popularity among his fellows, who instantly regard him as a born
leader. The pleasant prospect of an increase of income without working
for it is a bait that never fails to appeal most strongly to the least
energetic and deserving. A postman or dockyard hand finds that he can
win promotion and increased pay only by strenuous hard work, just as if
he were a mere artisan or shop assistant. But the agitators point out
that he can attain an equivalent result by bullying the local M. P.,
and so he joins the league or union formed for the purpose."

[Sidenote: _Sir William Harcourt on Post Office Employees_]

"Where is this to stop? The late Sir W. Harcourt[240] wrote (to me)
that the demands of the Postal employees reached a depth, or abyss,
which no plummet would fathom. We know now that they claim the Postal
surplus, which amounts to nearly five millions [sterling].... There
are 192,000 of them, and of these probably 100,000 have votes. Adding
these to the dockyard, arsenal, and stores factory hands, and other
Government employees, we have a political force that may turn the
scale at a General Election. Candidates are tempted to bid against one
another with the taxpayer's money. 'Let us be charitable!' said Sydney
Smith, and put his hand into a bystander's pocket. Our legislators were
proof against the hectoring of the Tudors, the violence of the Stuarts,
and the blandishments of the Georges; surely they will never yield to
the menaces of demagogues."

[Sidenote: _Thirty M. P.'s threatened with Loss of Seat_]

"At this point I would like to state briefly my own experience....
Last year great pressure was brought to bear in the House of Commons
on Members of Parliament, and, with thirty other Members, I was
threatened with the loss of my seat unless I voted to meet the demands
of the Postal servants. It was further intimated to me that the
Postal servants' vote, 100,000 strong, would turn out any Government.
A few minutes afterwards it fell to my lot to address the House on
the question of increase of postmen's wages.... I ended my speech by
declaring that civil servants who threatened Members of Parliament for
refusing to vote them increased salaries ought to be disfranchised.
Result--a meeting called in my constituency, my opponent placed in
the chair, and a vote of censure passed on me. The London postmen
came to Canterbury and addressed my constituents at the meeting. It
is not surprising, therefore, that at the recent election my agents
informed me that 46 postmen voted solid against me.[241] I do not
blame the postmen; they were perfectly justified in using their power;
but if I had not had at my back one of the most intelligent bodies of
electors in the United Kingdom, I should have been defeated through the
postmen's action.

"It was some consolation to me to receive in the House of Commons,
after my speech, hearty, though private, congratulations from
hard-working, earnest workingmen representatives, who expressed their
entire approval of what they were pleased to call my courage. But
something ought to be done to prevent a recurrence of such a scandal."

In view of Mr. Heaton's closing remarks, it is interesting to note
that four of the eight[242] Labor Members voted, and that all of them
favored the appointment of a House of Commons Select Committee.

* * * * *

[Sidenote: _Post Office Employees and the General Election of 1906_]

In the campaign preceding the General Election of January, 1906,
the several associations of Postal and Telegraph employees addressed
letters to the candidates for Parliament, asking those candidates
whether they would "support the claims of the Postal and Telegraph
employees and vote for the appointment of a Select Committee of the
House of Commons for the purpose of inquiring into their conditions of
pay and service; and stating that on their part the workers pledged
themselves to accept as final the decision of such a tribunal." At the
annual conference of the Postal Telegraph Clerks' Association, held in
March, 1906, the President of the Association said that nearly 450 of
the 670 Members of the House of Commons[243] had pledged themselves to
support a motion for a Parliamentary Inquiry into the position of the
Post Office employees.[244]

In the third sitting of the new Parliament, held on February 20, the
Postmaster General, Mr. Sydney Buxton, announced that the Government
had decided to appoint a Select Committee of the House of Commons.[245]
And on March 6, the Postmaster General introduced a motion for a
Committee of seven to be nominated by the Committee of Selection.
In response to the wishes of the House, the Postmaster General
subsequently changed his motion to one calling for a Committee of nine,
to be appointed by the whips of the several parties in the House.[246]

[Sidenote: _The Prime Minister on Election Pledges_]

The motion was carried without debate upon the question whether a
Committee should be appointed. In the course of the debate whether
the Committee should be appointed by the Committee of Selection, or
by the Party Whips, Lord Balcarres, who had been a Junior Lord of the
Treasury in the Balfour Government, used these words: "As regards
those Honorable Gentlemen who had entered Parliament for the first
time,[247] he thought he was fairly accurate when he said that they
had given pretty specific pledges upon the matter [of the appointment
of a Select Committee] to those who had sent them to the House."
Sir A. Acland-Hood, who had been Chief Whip and Patronage Secretary
to the Treasury in the late Balfour Government, said: "There was a
debate and a division [upon this question, last year,] and nearly
the whole of the supporters of the Government voted against the
appointment of the Committee. No doubt many of them suffered for it
at the General Election; they either lost their seats or had their
majorities reduced in consequence of the vote." And, finally, Sir
Henry Campbell-Bannerman, the new Prime Minister, expressed himself as
follows in the course of an argument in favor of a Committee appointed
by the Committee of Selection rather than by the House itself through
the agency of the Party Whips. The Prime Minister said: "There was
a great deal of force in what the Right Honorable Gentleman [Sir A.
Acland-Hood] had said as to the fears that were entertained in many
quarters of the effect on the Committee if appointed under pressure and
insistence, and the retroactive effect of old promises extracted in
moments of agony from candidates at the General Election."[248]

The Select Committee on Post Office Servants consists of: 4 Liberals,
Messrs. Barker, Edwards, Hobhouse and Sutherland; 2 Conservatives, the
Honorable Claude Hay and Sir Clement Hill; 2 Liberal and Labor Members,
Messrs. John Ward and G. J. Wardle; and 1 Nationalist, Mr. P. A.
Meechan.[249]

The reference to the Committee is: "to inquire into the wages and
position of the principal classes of Post Office servants, and also of
the unestablished postmasters. To examine, so far as may be necessary
for the purpose of their Report, the conditions of employment of these
classes. To report, whether, having regard to the conditions and
prospects of their employment, and, as far as may be, to the standard
rate of wages and the position of other classes of workers, the
remuneration they receive is adequate or otherwise."

In the spring of 1907, the Committee reported that it had not had time
to perform its task, and asked for reappointment. The evidence thus
far taken by the Committee had not been published at the date of this
writing, March 20, 1907.

* * * * *

[Sidenote: _Lord Stanley Congratulated_]

Lord Stanley was one of the many Conservative candidates defeated in
the General Election of January, 1906. When his defeat became known,
hundreds of telegrams were showered upon him by postal and telegraph
employees located in all parts of the United Kingdom. The telegram sent
by Liverpool postal and telegraph employees was typical of the lot. It
congratulated Lord Stanley upon his retirement to private life, and
assured him that the senders at all times would do all in their power
to make the retirement a permanent one.

FOOTNOTES:

[225] _The Times_, September 19, 1904.

[226] The apparent net profits of the Post Office Department average
about $18,500,000 a year. Those profits are subject to the correction
that the Post Office does not charge itself with interest and
depreciation upon its capital investment, which cannot be ascertained,
but must be very large.

[227] _Hansard's Parliamentary Debates_, March 10, 1890, p. 342. Mr.
McCartan asks the Postmaster General "on what grounds Messrs. C. Hughes
and C. H. Garland were recently punished." ... The intervention was
repeated on March 14, p. 865.

[228] _The Times_, August 25, 1904.

[229] _The Times_, September 19, 1904.

[230] _Hansard's Parliamentary Debates_, July 6, 1905, p. 1,350 and
following.

[231] August 29, 1903.

[232] In his annual _Report_, dated July 28, 1905, Lord Stanley stated
that the ultimate cost would be $1,861,500 a year.

[233] To be held in January, 1906.

[234] _Hansard's Parliamentary Debates_, July 18, 1905, p. 1,062.

[235] _Hansard's Parliamentary Debates_, July 6, 1905, p. 1,367.

[236] _Hansard's Parliamentary Debates_, July 6, 1905, p. 1,401.

[237] Ayes Noes
Conservatives } Government 9 210
Liberal Unionists } Supporters 0 37
Liberals } The 138 2
Nationalists } Opposition 49 0
Various factions 9 0
--- ---
205 249

[238]
Name Office
Mr. Herbert Gladstone Home Secretary
Mr. Lloyd George President of Board of Trade
Mr. Thos. Lough Parliamentary Sec'y of Board of Education
Mr. R. McKenna Financial Secretary to Treasury
Mr. J. A. Pease Junior Lord of Treasury
Mr. J. Herbert Lewis Junior Lord of Treasury
Captain Cecil Norton Junior Lord of Treasury
Mr. F. Freman-Thomas Junior Lord of Treasury
Mr. J. M. Fuller Junior Lord of Treasury
Mr. R. K. Causton Paymaster General
Mr. Geo. Lambert Civil Lord of Admiralty
Mr. Edward Robertson Secretary to Admiralty
Mr. Herbert Samuel Under Home Secretary
Mr. J. E. Ellis Under Secretary for India
Mr. H. E. Kearley Secretary of Board of Trade
Sir Jno. L. Walton Attorney-General
Mr. Thos. Shaw Lord Advocate

[239] A. Todd: _On Parliamentary Government in England_.

[240] Chancellor of the Exchequer, 1886 and 1892-95.

[241] At the election of 1906 Mr. Heaton received 2,210 votes, while
his opponent received 1,262.

[242] _The House of Commons Poll Book_, 1885-1906, issued by The
Liberal Publication Department.

[243] Composition of the House: Liberal and Labor Members, 428;
Conservatives, 130; Liberal Unionists, 28; and Nationalists, 80.

[244] _The Times_, March 17, 1906.

[245] _Hansard's Parliamentary Debates._

[246] _Hansard's Parliamentary Debates_, March 6, 1906, p. 323 and
following.

[247] 281 in number.

[248] _Hansard's Parliamentary Debates_, March 6, 1906.

[249] _Hansard's Parliamentary Debates_, March 9, 1906, p. 847.

CHAPTER XIV

THE HOUSE OF COMMONS, UNDER PRESSURE FROM THE CIVIL SERVICE UNIONS,
CURTAILS THE EXECUTIVE'S POWER TO DISMISS INCOMPETENT AND REDUNDANT
EMPLOYEES

[Sidenote: _Personal Bribery replaced by Class Bribery_]

The intervention of the House of Commons in the details of the
administration of the Post Office Department and the other State
Departments, is by no means confined to the raising of salaries and
wages. It extends to practically every kind of question that arises
out of the conflicts of the interests of the State servants and the
interests of the public Treasury. The intervention is due to the
organized action of the "civil service unions;" and it is exercised
primarily on behalf of classes of employees, but not exclusively. The
latter day spirit of the civil service unions is to make the cause
of the individual the cause of the class, and that brings about much
intervention through the House of Commons, by the organized civil
service, on behalf of individual State servants. The ancient form of
intervention on behalf of the individual who had claims that were
based on personal influence or family influence, on family ties, or
on friendship, has been abolished. In its place has been developed
intervention on behalf of the individual, prompted by the fact that
the individual in question is a member of a civil service union that
seeks to enforce certain ideals as to the terms and conditions that
shall prevail in the public service. Of the two forms of intervention,
the latter is the more pernicious and demoralizing, partly because it
is--or will become--more pervasive, partly because it rests on class
bribery and class corruption, as distinguished from the individual
bribery and the individual corruption upon which rested the old form of
intervention. Of those two forms of corruption, the bribery of classes
is the more difficult to eradicate.

[Sidenote: _State Employment means Life Employment_]

One of the most important results of this intervention on behalf of
individuals has been the establishment of the doctrine that once a
man has landed in the employ of the State, he has "something very
nearly approaching to a freehold of provision for life," to employ the
words of the Chairman of the Select Committee on the Civil Services
Expenditure, 1873.[250]

Before that committee, Sir Wm. H. Stephenson, Chairman of the Inland
Revenue Commissioners, said: "... if a man was reported to be
hopelessly inefficient, I should dismiss him; but even then you must
act with a great deal of forbearance. For the simple reason that
you are amenable to many opinions beside your own. You cannot act
absolutely upon your own judgment without being liable to be compelled
to give your reasons for that judgment; and these reasons, though
perfectly clear in your own mind, may not always be easy to give to
the satisfaction of another man.... I am afraid we should have a very
bad time of it out of doors if we exercised a little more freedom in
dismissing incompetent clerks and promoting deserving ones; I judge
very much by what I see; as it is, there is a great disposition, I
think, to exclaim against anything like an act of tyranny, and the
exercise of such freedom would be called tyranny.... I have no doubt
that if a public department had the power of absolute dismissal, it
would have a considerable effect in increasing efficiency; but what
I say is, that you cannot give them that power in the same way that
it is held by a man in private employment. You have too many critics;
you have the public newspaper press; you have Members of the House of
Commons who are personally interested in these people; and you would be
surprised, I am sure, if you knew the numerous instances in which, for
the smallest thing [inflictions of punishment], applications are made,
pressing that this man is an excellent man, a good brother, a kind
father, and all that kind of thing which influences men individually,
but which cannot [does, but should not] influence the judgment of the
heads of a public office." Sir William H. Stephenson was asked: "Do
you not think that it might be made a rule in your office, as in the
Customs, that any interference through a Member of Parliament should
lead to dismissal?" He replied: "Yes; but you must prove that a man
knows it. You cannot dismiss a man if some injudicious friend takes up
his case; and if a man has a friend, it is always an injudicious one
under these circumstances."[251]

Before this same committee of 1873, Mr. Stanfeld, M. P., Third Lord
of the Treasury, who, in 1869 to 1871 had been Financial Secretary
to the Treasury, said: ... "the great difference between the public
establishment and the private establishment is this: that practically
speaking, in a public establishment, you have a large proportion
of established clerks who can do no more than a moderate amount of
service.... Because you have not the faculty which men in private
business have, without any particular fault, of saying to a man: 'On
the whole, you do not suit me, and I mean to get somebody else.'
When you get a clerk on a public establishment, he remains on that
establishment with very rare exceptions, and you have to make the best
of your bargain; the result naturally is that, with the exception of
men of ability and energy, you have not so much stimulus for their
effort as you have in private employment, and you have not by any means
the same power of dealing with them." ...[252]

In 1888, before the Royal Commission appointed to inquire into the
Civil Establishments, this question of the great difficulty of
getting rid of incompetent or undesirable men, was threshed out at
great length. Sir Charles DuCane, Chairman of the Commissioners of
Customs, said: "But it is an invidious thing, I do not mean to say as
regards myself, but invidious rather as regards the [political] head
of a department [the Minister], to come and make complaints against
men whom one cannot perhaps accuse of any overt act of negligence or
carelessness, but who are merely rather below the level of ordinary
efficiency.... I think it would be a most desirable thing that we
should have the power of getting rid of incapable and inefficient men
who have yet managed to keep themselves out of any positive scrape or
offence, for which they would be charged before a Member of the Board
of Commissioners of Customs."[253]

To Sir S. A. Blackwood, Secretary to the Post Office since 1880, the
Chairman of the Royal Commission put the question: "Do you think it is
a real evil in the public service that there should not be the same
power to remove inefficient men as exists outside the public service,
of course I mean within certain limits, because the public service must
be different from private service, but in your experience, have you
found it to be a real evil in the way of efficiency as well as of wise
economy to be obliged to keep men whom you would be glad to get rid of
if you could have sent them away with something in their pocket, [_i.
e._, a pension]?" The answer was: "Yes, it is a serious objection." Sir
S. A. Blackwood even asserted that the Act of 1887, giving the Treasury
discretionary power to pension men unable to discharge efficiently the
duties of their office,[254] would not help much. "We should always
be asking an officer to relinquish his full pay, and to retire upon
a lesser pension than he would be entitled to if he served his full
time, and there is always a disinclination on the part of heads of
departments to do that."[255]

Sir Reginald E. Welby, who had entered the Treasury service in
1856, and had been made Permanent Secretary in 1885, said there was
full power to dismiss idle or incompetent persons without granting
pensions or allowances of any sort. Thereupon, Mr. F. Mitford, one of
the Members of the Royal Commission, asked: "Is not really the sole
difficulty that public departments have to contend with in exercising
that full power, the fact that Parliament is behind them, and a
Member of Parliament always asks questions [in the House] and brings
interest [pressure] to bear upon the head of the department, which
practically annuls that power? The difficulty lies not with the public
officer, but practically with the difficulties that are thrown in his
way outside his department by individual Members of Parliament?" The
Permanent Secretary of the Treasury answered: "There is always before
the heads of departments the fact that pressure may be brought to bear
by Members of Parliament, and it requires, therefore, that a case must
be very strong, that it must be a very good case before you would
dismiss. Probably you would be much more long-suffering in a Government
department, than you would be in a private establishment." Sir Reginald
Welby just previously had said: "I have known men dismissed from the
Treasury.... Perhaps I had better say, I have heard of men being
dismissed from the Treasury for simple idleness, but it was before my
time." Thereupon the Chairman had queried: "It is the fact, speaking
generally, is it not, that mere idleness and mere incompetence, without
very gross negligence of duty or gross misbehavior, does not bring
about dismissal from the service, either in the Treasury or anywhere
else that you are aware of?" The reply was: "I would rather put it in
this way: I think that Government offices are very long-suffering in
that matter. If the man was reported as distinctly very idle and not
doing his work he would be warned, and I think if it was repeated after
that (I am speaking of any fairly managed Government department), he
would be dismissed. But I think that a Government department is, for
one reason or another, more long-suffering than a private establishment
would be.... While I am admitting the possibility of there being
bad officers, I should like to add that both in the Upper and Lower
Division Clerks, we have got, on the whole, a very satisfactory set of
men under the present regulations of the Treasury, and that they do
their work well. I am happy to say that very few cases of complaint
come before me."

[Sidenote: _The House of Commons is Master_]

Mr. Lawson, a member of the Royal Commission, asked Sir Reginald Welby:
"But you would hardly plead the interference of Members of Parliament
as a justification for not getting rid of an unworthy servant,
would you?" Sir Reginald Welby replied: "It is not a good reason,
but as a matter of fact it is powerful. The House of Commons are our
masters."[256]

Sir T. H. Farrer, who had been Permanent Secretary of the Board of
Trade from 1867 to 1886, and had been a Member of the so-called
Playfair Commission, of 1876, on the Civil Service, was asked by Mr.
R. W. Hanbury, a Member of the Royal Commission of 1888, whether the
failure to dismiss incompetent men could not be attributed to "soft
heartedness" on the part of heads of departments? Sir T. H. Farrer
replied: "Yes, that is another aspect of the case, and it is no doubt
theoretically perfectly true; but I think it overlooks what is the real
difficulty of getting rid of useless men. There is a certain difficulty
in the soft heartedness of heads of departments and of Ministers.
But there is a very much greater difficulty in the pressure which is
put upon them by Members of the House of Commons. That is the real
difficulty; the real difficulty of the public service is getting rid of
bad men; and the real difficulty of getting rid of bad men is that no
Minister will face the pressure which is put upon him from outside....
I have had much personal experience of the matter; I have been
plagued all my life at the Board of Trade with inefficient men that I
wanted to get rid of, but have been unable to do so.... Parliamentary
pressure is the main difficulty.... Members are economical in general
[protestations]; but in particular cases they think more of their
constituents than of the public service. No doubt with a little
thinking I could recall a very great number of instances, but two or
three occur to me."

[Sidenote: _You may dismiss but you must not_]

"Not very many years ago there was a clerk of whom perpetual complaints
were made to me. He was in a hard-worked department, and the heads of
it told me repeatedly: 'We can do nothing with him.' At last we got it
arranged that he should go [with a large pension, on the theory that
his office was abolished, because no longer required]. My back was
turned--I was away on a holiday--and when I came back, I found that
Parliamentary pressure, by which I mean applications from Members, had
been put on, and in spite of us all, the man was back in the place to
the detriment of our credit. Let me mention another case. I was engaged
upon a reorganization of the department under one of the strongest
men [Ministers] I have ever served. What the President of the Board
of Trade said to me, in effect was: 'We must have new blood; we are
getting crowded up with effete men; I will back you in anything you
do, only you must undertake not to get me into a difficulty in the
House of Commons. I cannot afford it; the Government cannot afford time
for it; they cannot afford strength to fight battles of that kind.'
We set to work about the reorganization with our hands tied, and we
were obliged to say to these men: 'Well, if you stay here, we will
make it very uncomfortable for you; we will put you in the very worst
places in the office,' The Treasury offered good terms of retirement
[pensions], and in that way, after a good deal of fighting, we got
rid of most of them.... We had to give them very high terms [that is,
very liberal pensions]. I may mention a case which happened even since
then. I refer to the official Receivers in Bankruptcy. They were men
who were appointed only a few years ago, under the most stringent
conditions imposed by the Treasury and the Board of Trade, and without
the slightest reference to personal considerations or to politics. They
were told that they were appointed on trial, that they might be removed
at any moment if the Board of Trade desired it for the good of the
service. Fortunately, most of them have turned out extremely well. One,
perhaps more, turned out bad, but one certainly turned out very bad.
Perpetual complaints were made to me by the head of that department
that he could do nothing with this man, and that the business was
being badly conducted. After a good deal of trouble, after I left, it
was determined to remove this man. The Members of Parliament for the
county, as I am told, came and put pressure upon the President of the
Board of Trade [the Minister], till he was obliged to say: 'I cannot
remove him; he must stay.'"

[Sidenote: _Pension System no Remedy_]

To the foregoing testimony from the Permanent Secretary of the Board of
Trade, the Chairman of the Royal Commission replied: "I gather from
what you say, that, supposing it was possible, under this new system
of pensions and allowances, to give a man who was sent away from the
service the money which he had himself contributed toward his ultimate
pension, either with or without the addition of a Government grant,
you do not think that would get over the difficulty in getting rid of
incompetent men?" Sir T. H. Farrer replied: "No, I do not think it
would, unless the House of Commons passes a self-denying ordinance,
and refuses to interfere with the Ministers in the management of their
departments."[257]

Later in the examination, Lord Lingen, who had been Permanent Secretary
of the Treasury from 1869 to 1885, said to Sir T. H. Farrer: "You have
given a good deal of evidence as to the difficulties which the relation
of the public departments to Parliament creates. I think we might hold
there is nothing in private service analogous to what you may call the
triennial change of Government, that [when] everybody who has been
passed over [not promoted], who thinks he has any grievance, considers
that he has a fresh chance on a change of Ministry?" The Secretary of
the Board of Trade replied: "Yes, I remember distinctly one particular
case in which on every change of Government a fresh appeal was made
to the new Ministers on behalf of men who had been retired for good
reasons." Lord Lingen continued: "It revived questions which had been
supposed to be settled?" "Yes, it does, not infrequently."

On August 1, 1890, in the House of Commons, the Postmaster General, Mr.
Raikes, in speaking of a Post Office employee who had been disciplined,
said: "The case is one to which I have given a great deal of personal
attention; indeed, I may say that in cases of dismissal or punishment
I have always endeavored to satisfy myself thoroughly as to the facts,
and to mitigate, if I can, the effect of the regulations of the
Department." On that same day the Postmaster General stated--in reply
to Mr. Conybeare,[258] who was intervening on behalf of one Cornwell,
dismissed from the postal service--that Cornwell had been dismissed
for the second time. After the first dismissal, the Postmaster General
himself had reinstated Cornwell. The second dismissal had been
necessary "in the interest of the Service at large, but especially in
that of the other men employed on the same duty, his case should be
dealt with in an exemplary manner."[259]

In March, 1896, the Chairman of the Inter-Departmental Committee on
Post Office Establishments, asked Mr. Lewin Hill, Assistant Secretary
General Post Office: "Do you think there is any other particular
class of employment which is comparable with that of the postmen?"
Mr. Hill replied: "I thought of railway servants, whose work in many
ways resembles the work of our employees. If they have not the same
permanence as our people have, they have continuous employment so
long as they are efficient, but our people have continuous employment
whether they are efficient or not."[260] Several months later, Mr.
Hill testified as follows before this same Committee: "Our inquiries
have proved that the telegraph staff at Liverpool is excessive, and
it has been decided, on vacancies [occurring], to abolish the ten
appointments."[261] The meaning of this statement is, that if a mistake
is made, and too many men are appointed to a certain office; or, if
the business of an office falls off, the Government cannot correct
the redundancy of employees by dismissing, or by transferring to some
other office, the redundant employees. It must wait until promotion,
retirement on account of old age, or death shall remove the redundant
employees. Before this same committee, Mr. J. C. Badcock, Controller
London Postal Service, testified that in theory there were no first
class letter sorters in the foreign newspaper department of the London
Post Office, since there had been, since 1886, no work that called for
first class newspaper sorters.

But as a matter of fact there were thirty-seven "redundant first class
sorters, who, upon resignation, or pensioning, or death, would be
replaced by second class sorters."[262]

In 1902, Sir Edgar Vincent,[263] a Member of the Select Committee on
National Expenditure, 1902, asked Lord Welby, who had been Permanent
Secretary to the Treasury from 1885 to 1894: "It is, I presume,
extremely difficult for the Minister at the head of a Department to
dismiss, or place on the retired list incompetent officers?" Lord Welby
replied: "It is very difficult. Of course there are different degrees
of incompetency. It is not so difficult in the case of a notoriously
incompetent officer, but there are many people, as the honorable Member
is aware, against whom nothing whatever can be said, who are still
the very reverse of competent." Sir Edgar Vincent continued: "Can you
suggest any means of substituting for a Minister whom it is almost
impossible to expect to perform the duty, some authority who should
revise Establishments and exclude the bad bargains?" Lord Welby, of
course, replied that the remedy suggested would be inconsistent with
the principles of parliamentary government,[264] in that it would
substitute for the Minister, who holds office at the pleasure of the
House of Commons, some permanent officer or officers appointed by the
Ministry.

* * * * *

[Sidenote: _Difficult to dismiss Probationers_]

Oftentimes the difficulty experienced in dismissing unsatisfactory
public servants, extends even to persons appointed on probation.

In April, 1875, the Chancellor of the Exchequer, in the course of the
Financial Statement, said: "We now appoint young men upon probation,
and the understanding of that probationary employment is that if the
person is found after six months or a year to be unfit, he is told that
he must look elsewhere. This is a very invidious duty for the head of
an office to perform, and it is very often not performed."[265]

In 1888, Mr. Harvey, a Member of the Royal Commission on the Civil
Establishments, said: "The tendency in a Government office is for
the man to regard his probationary period as practically a '_nominis
umbra_' [the mere shadow of a name], nothing else."[266]

The Chairman of the Royal Commission of 1888 asked Sir Reginald Welby,
the Permanent Secretary to the Treasury: "Is there anything like a real
probation in any one of the divisions of the clerks at the Treasury, so
that you can find out [whether they are likely to prove competent]?"
"Yes, I think so. The principal clerk of the division to which the
probationer is attached makes a report at the end of six months; and I
have known a principal clerk to make a doubtful report. In that case,
if I remember rightly, the term of probation was extended."[267]

The boys employed by the Post Office Department for the delivery of
telegrams, are, in a way, on continuous probation. If they serve
satisfactorily, they are, at the age of 16, taken in training for the
position of postmen. In 1897, Mr. Lewin Hill, Assistant Secretary
General Post Office, said: ... "in London, in the past, the weeding out
of messenger boys at 16 years has not been carried out so far, I think,
owing to the paternal feelings of the Department. Every effort seems to
have been made to keep in the service anybody who could possibly scrape
through. But the country postmasters were, as a rule, careful to weed
out unsatisfactory lads." He continued: ... "We could have got better
postmen [in London], if we had had a free hand."[268]

* * * * *

In 1857 the opposition made in Parliament to the system of pensions,
led to the appointment of a Committee to inquire into the operation
of the Superannuation Act, 1834. That Committee stated as follows the
argument "from the public point of view" in favor of pensions. "Though
it is strictly the duty of heads of departments to remove from the
public service all those who have become unfit to discharge their
duties, yet experience shows that this duty cannot be enforced. It is
felt to be hard--and even unjust--and inefficient men are, therefore,
retained in the Service to the detriment of efficiency. They,
therefore, were unhesitatingly of opinion that the public interest
would be best consulted by maintaining a system of superannuation
allowances."[269]

In accordance with the foregoing recommendation Parliament, in 1859,
enacted that the Treasury might give "abolition terms" to persons whose
offices should be abolished in consequence of the "reorganization" of
their department, or branch of service. Under that Act, inefficient
persons who are "reorganized out of the service" are given "pro rata"
pensions, plus an allowance for "abolition of their office." For
example, a man aged 50, with 30 years of service, who would become
entitled to a pension at the age of 60, will be retired at 50 years,
with a pro rata pension on the basis of 30 years' service, plus an
allowance of 7 or 10 years' service for abolition of his office.[270]

[Sidenote: _Cost of Pensions to the Incompetent_]

In 1873, before the Select Committee on Civil Services Expenditure,
Sir William H. Stephenson, Chairman of the Commissioners of Inland
Revenue, illustrated the working of this system with the statement
that in 1873-74, the salaries paid in the Inland Revenue Department
would aggregate $4,808,580. An additional $683,160 would be required
for pensions; and a further $234,175 would be required on account of
the abolition terms given to men who had been reorganized out of the
Inland Revenue Department. Thus the "non-effective," or non-revenue
producing, charges of the department were equivalent to 19 per cent. of
the effective, or revenue producing, charges.[271]

In 1888 the Royal Commission appointed to inquire into the Civil
Establishments reported that the burden on the State for pensions was
equivalent to 12 per cent. to 15 per cent. of the working salaries,
and that the payment of the abolition terms raised the percentage in
question to 20 per cent. of the working salaries. Sir Reginald E.
Welby, Secretary to the Treasury, stated before the Commission, that
even the past liberal expenditure on account of pro rata pensions with
abolition terms, had not enabled the State to get rid of "inefficient
and incapable men." The Chairman of the Royal Commission spoke of the
abolition terms as amounting "almost to a scandal." Sir R. E. Welby and
Lord Lingen, a former Secretary to the Treasury, contrasted the State's
system of pensions with the system of the London and North Western
Railway. The Railway's pension system was maintained out of a fund
raised by a 2.5 per cent. reduction from the salaries of the employees,
and a 2.5 per cent. contribution from the treasury of the railway.

Sir R. E. Welby, Secretary to the Treasury, and other witnesses, spoke
of the abolition terms often acting as a premium on inefficiency.
Mr. Robert Giffen, the eminent statistician and political economist,
who also was an officer of the Board of Trade, said: "When a man is
reorganized out of the service, as a rule he gets so many years'
service added [to his actual service], that is to say, at 50 years, if
he has served 30 years, he may have 7 or 10 years' service added, and
thus get two-thirds of his salary as a pension; and he begins to get
his pension at once, instead of waiting until he is 60 years of age. A
man who thus gets a pension at 50 years, really gets more than double
what he would get if he waited until 60 years of age. The present value
of $100 a year, beginning at once at the age of 50 years, is a good
deal more than double the present value of $100 a year to be paid to a
man when he reaches 60 years. The difference in favor of the man who is
reorganized out of the service, as against the man who remains until he
is 60 years of age, is simply overwhelming to my mind."

Sir Algernon E. West, Chairman of the Inland Revenue Commissioners,
illustrated the working of the practice of getting rid of inefficient
men by reorganizing an office, by citing the following instance of
"successful" reorganization. Sir Algernon West had retired 39 upper
division clerks, permanently reducing the number of the staff by 39.
He had thus effected a saving in salaries of $70,000 a year. But he
had incurred an annual expenditure of $44,160 on account of pensions,
and an annual expenditure of $10,000 on account of abolition terms.
Therefore his net saving was not $70,000 but only $15,840. Yet Sir
Algernon West denominated his reorganization successful.

In the course of this reorganization, Sir Algernon West had increased
the hours of work from 6 hours to 7 hours. The reorganization, also,
had necessitated certain promotions. Sir Algernon had made it a
condition of promotion, that the man promoted should consent to work
7 hours a day. Men not promoted he gave $150 a year "as a personal
allowance in consideration of the extra hour they were called to
serve." One man, aged 34 years, declined to work more than 6 hours on
any terms, saying that the Government had made a contract with him for
six hours' work a day. In order to get rid of this man, Sir Algernon
West gave him a pension on the basis of 10 years' service. Legally,
of course, the man had no claim to any pension or abolition allowance
whatever, for he was in reality dismissed for refusing to perform the
duties demanded of him.[272]

FOOTNOTES:

[250] _Third Report from the Select Committee on Civil Services
Expenditure_, 1873; q. 4,283 to 4,288.

[251] _Third Report from the Select Committee on Civil Services
Expenditure_, 1873; q. 4,270 to 4,282, 4,146 and following, and 4,198
to 4,210.

[252] _Third Report from the Select Committee on Civil Services
Expenditure_, 1873; q. 4,937.

[253] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 17,559, 17,572, and 17,564.

[254] The Act of 1887 reads: "Where a civil servant is removed from
office on the ground of his inability to discharge efficiently the
duties of his office, and a superannuation allowance cannot lawfully
be granted to him under the Superannuation Acts of 1834 and 1859, and
the Treasury thinks that the special circumstances of the case justify
the grant to him of a retiring allowance, they may grant to him such
retiring allowance as they think just and proper." ...

[255] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 17,774 to 17,776, and 17,942a.

[256] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 10,532 to 10,544.

[257] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 19,980, 20,011 to 20,020, and
20,082.

[258] _Who's Who_, 1905, Conybeare, C. A. V., M. P., N. W. Div. of
Cornwall, 1885 to 1895; Member London School Board, 1888 to 1890;
Education: Christ Church, Oxford; Publications: _Treatise on the
Corrupt and Illegal Practices Acts_, 1892.

[259] _Hansard's Parliamentary Debates_, August 1, 1890, p. 1,647.

[260] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 11,694.

[261] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 15,166 to 15,171.

[262] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 1,881 to 1,883; and q. 1,270, Mr. G. E. Rably.

[263] _Who's Who_, 1904, Vincent, Sir Edgar; M. P. since 1899;
President of Council of Ottoman Public Debt, 1883; Financial Adviser to
Egyptian Government, 1883 to 1889; Governor of Imperial Ottoman Bank,
Constantinople, 1889 to 1897.

[264] _Report from the Select Committee on National Expenditure_, 1902;
q. 2,559 and 2,560.

[265] _Hansard's Parliamentary Debates_, April 15, 1875, p. 1,033.

[266] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 20,084.

[267] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 10,535 to 10,536.

[268] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 11,619 and 11,697.

[269] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888, p. xx.

[270] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 19,229, Mr. Robert Giffen, the
eminent statistician and economist, who was also an officer in the
Board of Trade.

[271] _Third Report from the Select Committee on Civil Services
Expenditure_, 1873; q. 4,225.

[272] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888, pp. xx and xxv, and q. 19,240, 20,434
and 20,435, 20,370, 20,392 to 20,395, 20,412, 20,434 to 20,438, 20,441,
19,229 and following, 17,245 and following, and 20,398 to 20,404.

CHAPTER XV

THE HOUSE OF COMMONS, UNDER PRESSURE FROM THE CIVIL SERVICE UNIONS,
CURTAILS THE EXECUTIVE'S POWER TO PROMOTE EMPLOYEES ACCORDING TO MERIT

In the matter of promotion, also, the civil servants' unions compel the
Members of Parliament to intervene, on behalf of individual employees,
in the details of the administration of the several Departments of
State. The organized civil service is not content that every man should
have an equal chance of promotion, so far as his industry and capacity
shall qualify him for advancement; it evinces a marked tendency to
demand equal promotion in fact, that is, the elimination of the effects
of the natural inequality among men. The House of Commons, in yielding
in this matter to the pressure from the organized civil service, is
tending to reduce the public service to a dull level of mediocrity,
which action at one and the same time impairs the efficiency of the
public service and makes the service of the State unattractive to able
and ambitious men.

In this matter of promotion, the permanent heads of the Departments
are hampered also by the unbusinesslike attitude toward the conduct of
the public business that characterizes large sections of the newspaper
press as well the great mass of the voters. That unbusinesslike frame
of mind, in turn, is the outgrowth of that untrained sympathy which
makes every one tend to sympathize with the individual, whenever
the interest of the individual clashes with that of the State. To
illustrate, in 1873, before the Select Committee on Civil Services
Expenditure, Sir William H. Stephenson, Chairman of the Commissioners
of Inland Revenue, stated that in his Department promotion was mainly
by seniority in the two lowest classes, to some extent by seniority in
the third class, but beyond that entirely by merit. But he hastened to
add: "Indeed, if I may judge by the complaints that I have heard out of
doors, occasionally in the newspaper press, and elsewhere, the system
of promotion by merit is supposed to be carried to rather an excessive
extent in the Inland Revenue."[273]

[Sidenote: _The Glasgow Postmaster's "Mistake"_]

In 1876, before the Select Committee on Post Office, Mr. Hobson,
Postmaster at Glasgow, stated that he could not promote his telegraph
operators according to their dexterity, he was obliged to promote
according to seniority. Mr. Gower, a member of the Select Committee
queried: "Therefore, there is no encouragement whatever to superior
dexterity?" Mr. Hobson replied: "I should not recommend a clerk for
promotion ... if I were satisfied that he was not doing all he could
to improve himself ... and was only an indifferent operator. I should
mention that in submitting the report, and recommend him to be passed
over." Mr. Gower continued: "But suppose he took every sort of pains to
improve himself, but did not improve?" The answer came: "I would then
recommend him to go forward [_i. e._ for promotion]." Mr. Gower then
asked: "Have you any power to exchange a clerk who is a slow operator
for another quicker operator in a district where it would not signify?"
The Postmaster at Glasgow replied: "None whatever."[274] The reader
will recall that there are numerous telegraph stations in Glasgow.

In April, 1877, the Postmaster General, Lord John Manners, replied
to the Report of the Select Committee of 1876, in a letter to the
Lords Commissioners of the Treasury. He concluded the letter with
the statement: "In conclusion, I beg leave to say that it is, I
think, hardly worth while to attempt to contradict the mistakes as
to promotion into which the postmaster of Glasgow was accidentally
betrayed in giving his evidence before the Committee of last Session,
and to which no reference is made in their Report."[275]

Before the same Committee, Mr. Edward Graves, Divisional Engineer,
recommended that the head of the Post Office establish the rule, "that,
other things being equal as to seniority and general business capacity,
preference for promotion shall always be given to the telegraph clerk
who has shown himself possessed of technical knowledge, and who is
desirous of obtaining technical information."[276]

Passing over a period of 28 years, that is, from the year 1876 to the
year 1904, we find Mr. E. Trenam, Controller London Central Telegraph
Office, testifying that because of danger that in the immediate future
there would be a lack of telegraph clerks who had a knowledge of the
technics of telegraphy, Mr. W. H. Preece, Engineer-in-Chief, had caused
a special increase in pay--$26 a year--to be offered to men who should
acquire such knowledge. The witness added that "unfortunately many of
the men who have [acquired] this knowledge are comparative juniors,
and we are compelled to put them to work which those receiving higher
pay are incompetent to perform. It will take some years to adjust the
anomaly ... [that is, before the incompetent men receiving higher pay
shall have been pensioned or shall have died]".[277]

[Sidenote: _Promotion by Seniority, not Jobbery, the Public Service's
weak Point_]

Before the Royal Commission of 1888, appointed to inquire into the
Civil Establishments, Sir Thomas H. Farrer, who had been a Member of
the Playfair Royal Commission of 1876, and had been Permanent Secretary
of the Board of Trade from 1867 to 1886, said: "I should like to say
that in the discussion which led [in 1872] to the adoption of Mr.
Lowe's [Chancellor of the Exchequer] scheme[278] [for the reform of
the civil service] a mistake was often made, and is still made, in
supposing that the great evil of the service is jobbery. That is not
the case, and I say so with great confidence, having regard to what has
been done by Ministers whom I have served of both parties. The real
evil of the service is promotion by routine, and not jobbing in the
selection for superior places.[279] But make your regulations what you
will, the _sine qua non_, to make any regulations work well, is that
the men at the head of the different offices shall have discretion,
honesty, and courage, and shall not be afraid to put up the good men
and to keep the inferior men in their place. I am quite confident from
my own experience that it can be done, but I am certain that it can be
done only if the men at the head of the offices will take a good deal
of trouble about it." Lord Lingen, a Member of the Royal Commission,
and a former Permanent Secretary to the Treasury, interpolated: "A good
deal of trouble and a good deal of disagreeable interference." Mr.
Farrer continued: "It requires tact, because of course you must not
put a man up for mere merit. You cannot take a lad of 19 and put him
over a man of 30 without a very strong reason; but taking the different
sub-heads of the department into counsel; by a little give and take; by
care, discretion, and confidence in the perfect honesty with which the
thing is done, I believe it can be perfectly well managed.... The key
of the whole thing is to put the proper men at the top of the offices."

Lord Lingen and Mr. Farrer then went on to state that with every change
of the Government of the day, some civil servants who had been passed
over, or had some other grievance, made the attempt to have their cases
reopened.[280]

Sir Charles DuCane, Chairman of the Commissioners of Customs, said:
"We promote strictly by merit; we never allow seniority to weigh with
us."[281]

Sir Algernon E. West, Chairman of the Commissioners of Inland Revenue,
said that he promoted by merit within the limits allowed him by the
Treasury ruling that no clerk could pass out of the second class
into the first class without 10 years' service in the second class.
Subsequent testimony established the fact that the Treasury had made
that ruling in order to prevent the second class clerks from bringing
pressure on Members of Parliament with the view to securing automatic
promotion from the second class into the first.[282] Just before
making the foregoing statement, Sir Algernon West had said: "If you
take the whole Civil Service, I think you will find a general concord
of opinion that the man receiving from $2,500 to $3,000 a year is the
weakest part of the Civil Service. I am not speaking of a young man
who is in process of going higher, but of an elderly man who has risen
to that kind of high salary, and has no prospect of getting anything
more.... An ordinary middle aged man, who has got to $2,500 or $3,000
or $3,500, generally is far too highly paid." Mr. R. W. Hanbury, a
Member of the Royal Commission, queried: "How would he get such a
position?" The answer came: "By natural progression," _i. e._ promotion
by routine.[283]

Sir Lyon Playfair, a man of vast experience in the administration of
the British Civil Service, said: "Promotions by merit hardly take place
in most offices, I think; at all events, there are very few instances
brought before us."[284]

[Sidenote: _Promotion by Seniority the Great Evil_]

The Royal Commission itself reported: "We think that promotion
by seniority is the great evil of the Service, and that it is
indispensable to proceed throughout every branch of it strictly on the
principle of promotion by merit, that is to say, by selecting always
the fittest man, instead of considering claims in order of seniority,
and rejecting only the unfit. It is no doubt true that objections on
the score of favoritism may arise in the application of such a rule
in public departments, and the intervention of Members of Parliament
also presents an obvious difficulty, but we think that such constant
vigilance, tact, and resolution as may fairly be expected on the part
of heads of branches and of offices, will meet these objections, and we
believe that the certain advantages of promotion by merit to the most
deserving men, and therefore to the public service, are so great as to
be sure, in the long run, to command public support."

[Sidenote: _Able Men must "wait their Turn"_]

Shortly before the Royal Commission had made this recommendation,
in words which seemed to place the responsibility for past failure
to promote by merit, on the permanent officers of the Departments,
as distinguished from the political heads of the Departments, the
Ministers, Mr. Raikes, the Postmaster General, and the representative
in the House of Commons of the University of Cambridge, had refused
to accept the advice of the Permanent Secretary of the Post Office,
Mr. S. A. Blackwood, in filling a post of some importance in the
Secretary's office. On March 1, 1887, the Postmaster General, Mr.
Raikes, in reply to questions put to him in the House of Commons,
said: ... "It is also the fact that I have recently declined to adopt
the Secretary's recommendation to promote to the first class [in the
Secretary's office] one of the junior officers in the second class over
the heads of several clerks of much longer standing. The gentleman whom
I have promoted was, in my judgment, fully qualified for promotion,
and was senior clerk in the class, with the exception of one officer
who, on the Secretary's recommendation, has been passed over on
sixteen occasions.... What was I asked to do? I was asked to promote
a gentleman who was much lower down in the class, a gentleman who was
third or fourth in the class, and to place him over the heads of his
colleagues. This I declined to do. I made inquiries in the office, and
I found that the gentleman who was promoted was a meritorious officer
who had discharged his duties with adequate ability, and therefore
I thought there was no reason for promoting over his head and over
the heads of one or two other competent officers, a junior officer
who could well afford to wait his turn. I acted in the interests of
the Public Service, and especially in the interests of the Department
itself."[285]

* * * * *

No Post Office official in the United Kingdom has power to make a
promotion. No one has power to do more than recommend for promotion.
Each recommendation for promotion is examined by the surveyor, and
is then sent to headquarters, where "a most vigilant check is always
exercised, not from the suspicion that there has been favoritism,
but in order to secure that favoritism shall not be practised."[286]
Ultimately the Postmaster General passes upon every recommendation.
Sometimes the action of the Postmaster General is merely formal, and is
limited to the mere affixing of the Postmaster General's signature to
the recommendation made by the permanent officers of the Department;
at other times it is independent, and is preceded by careful
consideration of the case by the Postmaster General himself. Whether
or not the Postmaster General shall give his personal attention to a
recommendation for promotion, is determined largely by the presence or
absence of the political element, that is, the temper of the House of
Commons. The Postmaster General is not a mere executive officer with
a single aim: the efficient administration of his Department. He is
first of all an important Minister, that is, one of the aids of the
Prime Minister in keeping intact the party following. He must know
to a nicety how any given administrative act in the Post Office will
affect his party's standing, first in Parliament, and then among the
constituents of the Members of Parliament. It is true that no British
Postmaster General would convert the Post Office into a political
engine for promoting the interests of his party; but it is equally
true that no British Postmaster General would for a moment lose sight
of the fact that Governments have not their being in either a vacuum
or a Utopia, but that they live in a medium constituted of Members of
Parliament and the constituents of Members of Parliament.

In the course of a protest against the Postmaster General being a Member
of the House of Lords, Sir H. H. Fowler[287] recently said: "No man who
has sat in the House of Commons for 10 years can be ignorant of the
fact that there is a tone in the House; that there are occasions in
the House when, in dealing with votes [of Supply] and administrative
questions, a Minister is required, who, with his finger on the pulse
of the House, can sweep away the red tape limits and deal with the
questions at once on broad general public grounds." To make the
statement complete, Sir H. H. Fowler should have added the words: "and
grounds of political expediency." In the course of his reply to Sir
H. H. Fowler, Mr. R. W. Hanbury, Financial Secretary to the Treasury
and representative in the House of Commons of the Postmaster General,
said: "When I undertook the representation of the Post Office in the
House of Commons, the first rule I laid down was that [in replying to
questions put by Members as to the administrative acts of the Post
Office] I would take no answer from a permanent official, and that all
answers [framed in the first instance by permanent officials] should be
seen and approved by the Postmaster General [a Member of the House of
Lords]. I also reserved to myself full discretion to alter the answers
if I saw any necessity so to do."[288]

[Sidenote: _The Anxieties of Postmasters General_]

In 1896, before the Tweedmouth Committee, Mr. H. Joyce, Third
Secretary to General Post Office, London, said: "I well remember Mr.
Fawcett's[289] address to the head of a large Department [of the Post
Office] who, ... having a large number of promotions to recommend, had
told the officers concerned whom he had recommended, and whom he had
not, and what made the matters worse, he had in his recommendations
taken little account of seniority, whereas Mr. Fawcett, like Mr. Arnold
Morley,[290] had a perfect horror of passing anyone over. I only saw
Mr. Fawcett angry on two occasions, and that was one of them."[291] A
moment before giving this testimony, Mr. Joyce had said: "It is always
a matter of deep regret to the Postmaster General--every Postmaster
General under whom I have served--when he is constrained to pass anyone
over. I have seen Mr. Arnold Morley in the greatest distress on such
occasions."[292] Again, in defending the action of the Post Office in
promoting one Bocking, a second class sorting clerk at Norwich, over
the heads of 15 men in his own class, and 8 men in the first class,
to a full clerkship, Mr. Joyce said: "It is a matter of the greatest
regret to the Postmaster General to feel constrained to pass over so
many officers, all of whom were thoroughly respectable and zealous, and
performed the duties on which they were employed very well, but the
lamentable fact remains that they were not fit for a higher position;
every endeavor was made at headquarters to what I might call squeeze
them through, but it was no use." Mr. Badcock, Controller London Postal
Service, corroborated this testimony with the words: "The statement
is absolutely correct. The reports on which it was based can be
produced."[293] In passing it may be added that in February, 1895, Mr.
R. J. Price, M. P., for Norfolk, East, sought to intervene from the
floor of the House of Commons in this case of promotion. In 1892 and
1895, Mr. Price had been returned to Parliament from Norfolk, East,
with majorities of respectively 440 votes and 198 votes.

Still, again, at the Barry Dock Post Office, a branch office in
Cardiff, one Arnold had been promoted from position number 9, by
seniority, among the second class telegraph clerks, to a full
clerkship, skipping class 1 of the telegraphists. Of this action, Mr.
Joyce said: "It was a matter of great regret to the Postmaster General,
as expressed at the time, to pass so many officers, many of them most
deserving men, but above Mr. Arnold there was actually no one competent
to fill this important post. Some had a knowledge of postal work,
and some a knowledge of telegraph work, but none [beside Mr. Arnold]
were conversant with work of both kinds, and some were otherwise
objectionable. Barry Dock had suddenly shot into existence as a large
town, which has now a population of about 13,000, and so painful was it
to the Postmaster General to pass over all these deserving officers,
that, rather than do so, he seriously contemplated raising Barry Dock
to the level of a post town, and giving it a separate establishment of
its own."[294] Again, one Robinson was transferred from the Post Office
at Pontefract to a clerkship in the office of Blackpool, being made to
pass over the heads of two young men at Blackpool, by name of Eaton
and Butcher. Mr. Joyce said: "The case was specially put before the
Postmaster General, and with all his horror of passing people over, he
decided that the two young men Eaton and Butcher were not qualified for
promotion."[295]

* * * * *

[Sidenote: _"A Strong Order"_]

In 1885, one Robinson, a postman at Liverpool, and number 210 in his
class, was jumped to the position of assistant inspector. "He had,
when a young postman, been selected by his inspector as a superior and
promising officer. He had been temporarily employed [by way of tests]
as assistant inspector, and had discharged the duties so efficiently
that, on a vacancy occurring, he had been promoted to it." This case,
as well as those previously mentioned, were cited as "grievances,"
before the Tweedmouth Committee, by the men selected by the Post
Office employees to act as their spokesmen before the Committee. Lord
Tweedmouth, chairman of the Committee, commenting on the case, said
to Mr. Joyce: "Still, it seems to have been rather a strong order to
appoint an assistant postman to such an office and to give him such a
great promotion." Mr. Joyce replied: "Yes, it certainly does seem so;
but for the position of inspector or assistant inspector of postmen
there is no doubt that qualifications are required which are not
ordinarily to be found in postmen.... For the positions of inspectors
and assistant inspectors, I think I may say that the local authorities,
and also headquarters, are more particular than they are about any
other promotion, and they are most anxious to select actually the best
man. In almost every other promotion, very great allowance is made for
seniority; but in the case of inspectors it is not so, on account of
the somewhat rare qualities required of inspectors, and because the
post is a most invidious one."[296]

The reader will note that in 1896 the Post Office employees were
complaining of a promotion made in 1885.

[Sidenote: _The Ablest Man in the Sheffield Office_]

It was established before the Tweedmouth Committee that in instances
the Post Office employees, with the aid of Members of the House
of Commons, have succeeded in forcing the Post Office to revoke
promotions, or to promote men that have been passed over. For example,
Mr. Joyce, Third Secretary, General Post Office, said: "Wykes is
unquestionably a very able man--probably the ablest man in the
Sheffield office--and it is quite true that he was promoted [from
a second class sortership] to be an assistant superintendent; but
for reasons quite unconnected with his ability and qualifications,
that promotion has been cancelled. Having said that, I trust the
Committee will not press me further upon the point, inasmuch as it
is very undesirable that I should say more." Mr. Spencer Walpole, a
Member of the Committee and the Secretary of the Post Office, added:
"Except, perhaps, that the cancelling of that promotion had nothing
to do with the evidence that has been quoted?" Mr. Joyce replied: "It
had nothing to do with that; the matter is still in a certain sense
_subjudice_."[297]

[Sidenote: _An M. P. promotes Eleven Men_]

In 1887, one M'Dougall, a second class sorter in Liverpool, was
made a first class sorter, being promoted over the heads of 14 men
whom the Liverpool postmaster had reported to be "not qualified for
the duties of the higher class." On March 31, 1887, Mr. Bradlaugh
brought the matter up in the House of Commons, by means of a question
addressed to the Postmaster General. He was not satisfied with the
answer that the men passed over had been reported "not qualified for
promotion."[298] Therefore, on June 6, 1887, in Committee of Supply, on
the Post Office Vote, Mr. Bradlaugh again brought up the case of the 14
Liverpool sorters who had been passed over. He said he had personally
investigated the qualifications of the men, and had found "that none of
them warranted the answer given by the Postmaster General" [on March
31].[299] Mr. Bradlaugh also brought up the case of one Hegnett, who
had been made assistant superintendent over the heads of 19 persons
"who were his seniors by many years." Also the case of one Helsby,
promoted over the heads of 11 persons. Also the case of one Miller,
promoted over one Richardson, "who had been acting as assistant
superintendent for years with the salary of a Supervising Clerk only."
Mr. Bradlaugh spoke of the Committee of Supply as "the only tribunal
that can overrule the Postmaster General." On June 17, Mr. Bradlaugh
again intervened on behalf of the 14 men who had been passed over.

Before the Tweedmouth Committee, Mr. F. T. Crosse, a sorting clerk at
Bristol, and one of the spokesmen of the Post Office employees, said:
"Macdougall, Liverpool, a second class sorting clerk, was promoted to
the first class over the heads of 14 men, his seniors. Mr. Bradlaugh,
M. P., brought the matter up in Parliament during the discussion on the
Estimates. The result of Mr. Bradlaugh's intervention was that 11 of
the 14 men passed over were promoted in a batch six months later."

Mr. Joyce, Third Secretary to General Post Office, London, said it was
true that "very soon afterward," 11 of the 14 men were promoted.[300]
"A great point was stretched" in favor of 5 of the 11 men. Those 5 men
were technically called single duty men, and since 1881 no sorting
clerk had been promoted to the first class [at Liverpool] who could not
perform dual duty. Although these five men were single duty men, and
therefore unable to rotate with others, which was a "great disability,"
they were promoted by reason of Mr. Bradlaugh's intervention.

In explanation of the Bradlaugh episode, it should be added, that
dual duty men are those who are able to act as letter sorters as
well as telegraphists; while single duty men are able to act only as
sorters, or as telegraphists. In order to reap full advantage from the
consolidation of the telegraph business with the Postal business, the
Post Office for years has been seeking to induce as many as possible
of its employees to make themselves competent to act both as sorters
and as telegraphists. At offices where it would be particularly
advantageous to have the men able to act both as sorters and as
telegraphists, the Post Office has sought to establish the rule that
no sorter or telegraphist shall be promoted to the first class, unless
able to act both as sorter and as telegraphist.

Mr. Crosse was not the only witness before the Tweedmouth Committee
whose testimony illustrated "the stimulus" conveyed by questions in
the House of Commons. Mr. C. J. Ansell, the representative of the
second class tracers in London, stated that in 1891 two vacancies
among the first class tracers in a London office had been left open
for respectively 5 months and 8 months. He added: "In March, 1894, the
Postmaster General's attention had to be called to this disgraceful
state of affairs [by the tracers' union]. It required, however, the
stimulus of a question in the House of Commons. We do not know how
far the Postmaster General is responsible for this state of affairs,
but it is only fair to state that his attention being drawn to this
matter by the question, we were successful in getting those promotions
ante-dated."[301]

* * * * *

The limitations upon the Postmaster General's power to promote men in
accordance with the advice tendered him by his official advisers by no
means is confined to the cases of promotion among the rank and file.
For instance, it was established by the testimony given before the
Tweedmouth Committee, that the Postmaster cannot freely promote, to
offices of more importance, postmasters who show that they have more
ability than is required to administer the offices over which they
happen to preside. For if a postmaster proves to be not equal to the
demands of his office, the Postmaster General cannot always remove
him to a smaller office, promoting at the same time the more able man
who happens to be in charge of the smaller office. The Department
tries to meet the situation by sending to the aid of the relatively
incompetent postmaster "a smart chief clerk," taking care, however,
that the inefficient postmaster shall receive less than the full salary
to which the volume of business of the office would entitle him. If
that expedient fails, the Department will transfer the postmaster.
Mr. Uren, postmaster at Maidstone, and President of the Postmasters'
Association, even asserted that nothing short of misconduct would lead
to the transfer of a postmaster.[302] It should be added, however, that
Mr. Uren's testimony related to the small and medium sized places only,
not to the larger cities.[303]

It must not be inferred, however, that the postmasters of the small
and medium sized places appeared before the Tweedmouth Committee to
demand unrestricted promotion by merit. On the contrary, with the great
bulk of the public service of all descriptions,[304] they held that
promotion is "slow and uncertain" and that the system of promotion
by merit "is thoroughly uncertain in its practical working." They
protested also against the uncertainty and inequality inseparable from
the system of making postmasters' salaries dependent upon the volume
of business done by the several and individual Post Offices. They held
that no postmaster should be made to suffer by reason of the fact that
he happened to be stationed in a town or city that was not growing,
or was not growing so rapidly as were other cities. By way of relief
from the foregoing "uncertainties" and "inequalities" they demanded
a reorganization of the postal service which should secure to the
postmasters regular annual increments of pay, and should "regularize"
promotion.[305]

[Sidenote: _Rank and File Oppose Promotion by Merit_]

It will be remembered that the Royal Commission appointed to inquire
into the Civil Establishments, 1888, expressed the belief: "that the
certain advantages of promotion by merit to the most deserving men,
and therefore to the public service, are so great as to be sure, in
the long run, to command public support." But the fact remains that a
large part of the rank and file of the British civil service is growing
more and more intolerant of promotion by merit, and demands promotion
by seniority. It will not accept as a fact the natural inequality of
men; it asserts, with its cousins at the Antipodes, the Australasian
civil servants, that it is the opportunity that makes the man, not the
man that makes the opportunity. This impatience of the rank and file of
the civil servants of promotion by merit was brought out in striking
manner by many of the "grievances" cited by the men who appeared before
the Tweedmouth Committee as the accredited representatives of the Post
Office employees. Some of those allegations of grievance have just been
recorded, but this matter is of sufficient importance to warrant the
recording of still others.

Mr. Joseph Shephard, Chairman of the Metropolitan Districts Board
of the Postal Telegraph Clerks' Association, complained before the
Tweedmouth Committee that one West, who had entered the telegraph
service as a learner in 1881, one month after one Ward had entered as
a learner, in 1896 was receiving $640, whereas Ward was receiving
only $550. It was true that Ward had "had the misfortune to fail in
the needle examination," the first time he had tried to qualify as a
telegraphist, but "that little failure" ought not to have made the
difference which existed in 1896. Mr. Shephard also complained that one
Morgan, after 14 years and 11 months of service, was receiving only
$550, whereas one Kensington, after 14 years and 5 months of service,
was receiving $670. He brushed aside as of no consequence, the fact
that Kensington had "qualified" in four months, whereas Ward had taken
twelve months to "qualify."[306]

One Richardson, a telegraphist, at his own request had been transferred
from Horsham to East Grinstead, and thence to Redhill, because of the
small chances of vacancies at the first two places. But the staff at
Redhill was weak and therefore the Post Office could not follow its
usual practice of promoting a man, "not because he is a good man, but
because he is not a bad one," to use the words of Mr. J. C. Badcock,
Controller London Postal Service.[307] The authorities had to promote
the best man at Redhill, and thus Richardson was passed over. Mr. James
Green, who appeared as the representative of the Postal Telegraph
Clerks' Association, referred to Richardson's case as "the case of a
learner who with some 5 years' service is, according to my information,
sent here and there relieving, presumably as a sort of recompense,
though what his future will be remains a mystery. What surprises me
in this matter is the spirit of indifference displayed by the heads
of our Department regarding the hopelessness of these learners'
positions."[308] One J. R. Walker was an indoor messenger until
October, 1893, when he was apprenticed a paid learner. Shortly before
October, two lads had been brought in as paid learners; and, after a
short service, they were appointed sorting clerks and telegraphists.
They were promoted over Walker, because of their superior education and
intelligence. Mr. Green, the representative of the Postal Telegraph
Clerks' Association, admitted the superior education of the lads in
question, but complained that they had been preferred to Walker.[309]

[Sidenote: _The Crompton Episode_]

One Crompton, a letter sorting clerk at Liverpool, in his leisure
moments had made himself a telegraph instrument, had taught himself
to telegraph, and had acquired a considerable technical knowledge of
electricity. He had attracted the attention of the superintending
engineer at Liverpool; had been promoted, in 1886, to the office of
the superintending engineer; and, by 1896, he had become one of the
best engineers in the service. In 1896, Mr. Tipping, the accredited
spokesman of the Postal Telegraphists' Association as well as of the
Telegraph Clerks' Association, complained of the promotion of Crompton,
which had occurred in 1886. He said: "It seems most unreasonable that
men who have, in some cases, not the slightest acquaintance with
telegraphic apparatus and methods of working, should be preferred
to those whose whole period of service has been passed in immediate
connection therewith. It is apparent that such an absence of method is
open to very serious objections, and allows great freedom of choice
to those upon whose recommendations the appointments are made. In
order, therefore, to safeguard, on the one hand, the interests of
the department, and, on the other, to encourage those members of the
telegraph staff who desire, by energy and ability, to improve their
official _status_, the following suggestions are humbly submitted: That
vacancies for junior clerkships in the offices of the superintending
engineers, and for clerks at relay stations, should be filled by open
competitive examination, held under the control of the Civil Service
Commissioners, and that telegraphists only be eligible."[310]

The Crompton episode shows what minute supervision over the
administration of the Post Office the civil service unions seek to
exercise. The same minute supervision was attempted as recently as
1903-04 by Mr. Nannetti, M. P. for the College Division of Dublin,
and also a Member of the Corporation of Dublin, as well as a member
of the Dublin Port and Docks Board.[311] On March 23, 1903, Mr.
Nannetti spoke as follows, in the House of Commons: "I beg to ask the
Postmaster General whether his attention has been directed to the fact
that two female technical officers, appointed in connection with the
recently introduced intercommunication switch system in London, were
selected over the heads of seniors possessing equal qualifications,
and whether, seeing that in one case the official selected was taught
switching duties by a telegraphist who is now passed over, he will
state the reason for the selection of these officers?" The Postmaster
General, Mr. Austen Chamberlain, replied: "The honorable Member has
been misinformed. There is no question of promoting or passing over
any officer. All that has been done is to assign to particular duties,
carrying no special rank or pay, two officers who were believed to be
competent to perform them." On May 7, 1903, Mr. Nannetti followed up
the question with another one, namely: "I beg to ask the Postmaster
General whether his attention has been called to the fact that two
women telegraphists were selected to perform technical duties in
reference to the intercommunication switch in London, who were juniors
in service and possessed of less technical qualifications than other
women telegraphists who were passed over; and whether, seeing that,
although official information was given that such selection was not a
question of promotion and no special rank or pay would result, one of
the two officers concerned has been appointed to a superior grade on
account of her experience gained by being selected for these duties,
he will explain why the more senior and experienced women were passed
over in the first place?" The Postmaster General replied: "I have
nothing to add to the answer I gave on March 23, beyond stating that
the officer to whom he is supposed to refer has not been appointed to
any superior grade. She has merely been lent temporarily to assist
at the Central Telephone Exchange in work for which she has special
qualifications."[312]

On April 19 and May 12, 1904, Mr. Nannetti again protested against
the promotion of the woman in question to the position of first class
assistant supervisor, saying: "This girl was appointed because she had
strong friends at Court." ... On the latter date Mr. Nannetti also
intervened on behalf of a telegraphist at North Wall, whose salary had
been reduced from $6 a week to $5, as well as on behalf of one Wood,
who had been retired on a reduced pension, by way of punishment. The
case of Wood, Mr. Nannetti had brought up in 1903, when the Post Office
Vote was under discussion. For the purpose of bringing these several
matters before the House, he now moved the reduction of the salary of
the Postmaster General by $500.[313]

On March 16, 1903, Mr. Nannetti asked whether the statement of the
Controller that there was not a man qualified for promotion in the
[Dublin letter sorting] branch had had any influence "with the
Department in the filling of a certain vacancy in the Dublin Post
Office."[314] That question illustrated a type of intervention that
suggests the possibility of Great Britain reaching the stage that
has been reached in Australia, where Members of Parliament have been
known to move reductions in the salaries of officers who had offended
the rank and file by attempting to introduce businesslike methods
and practices. If that stage ever is reached, there will be a great
multiplication of cases like the following one. Before the Tweedmouth
Committee appeared Mr. J. Shephard, Chairman Metropolitan Districts
Board of Postal Clerks' Association, to champion the cause of Mr. ----.
Said Mr. Shephard: "I have it here on his word that his postmaster
has recommended him for a vacant clerkship at the District Office.
Mr. ---- has served for many years under the eyes of this postmaster
who recommends him for promotion, and I take it that that is full
and sufficient evidence of Mr. ----'s fitness to perform the duties
of the clerk." Mr. J. C. Badcock, Controller London Postal Service,
testified in reply that he had summoned the postmaster in question, who
had admitted that Mr. ---- had discharged "minor clerical duties" in a
perfectly satisfactory manner, but that his recommendation that Mr. ----
should be promoted to a clerkship, "was made more out of sympathy with
the man than with any hope that he would be qualified to undertake
the higher duties which he would have to succeed to if appointed to a
clerkship."[315]

* * * * *

[Sidenote: _M. P.'s act in Advance_]

In March, 1887, Mr. Bradlaugh, M. P., intervened in the House of
Commons on behalf of two telegraph clerks at Liverpool who feared they
were about to be passed over in favor "of a young man who entered the
Engineering Department nine months ago as a temporary foreman."[316]

In April, 1902, Captain Norton intervened on behalf of two letter
sorters, R. H. Brown and H. Johnson, who feared they were going
to be passed over in the filling of certain vacancies among the
overseers.[317] In 1906, Captain Norton was made a Junior Lord of the
Treasury in the Campbell-Bannerman Liberal Government.

In March, 1903, Mr. M. Joyce, M. P. for Limerick as well as an
Alderman, asked the Postmaster General:

"Whether it is his intention to promote a local official to the
assistant superintendentship now vacant at the Limerick Post Office,
and, if not, will he assign the reason?... May I ask whether the duties
of this office have not been performed in the most satisfactory manner
by a local officer during the absence of the assistant superintendent,
and will he give this matter due consideration, as every class of the
community would be pleased at such an appointment."[318]

In April, 1903, Mr. Shehan asked the Postmaster General: "Whether his
attention has been directed to an application from Dennis Murphy, at
present acting as auxiliary postman, for appointment to the vacant
position of rural postman from Mill Street to Culler, County Cork; and
whether, in view of the man's character and qualifications, he will
consider the advisability of appointing him to the vacancy?"[319]

In February, 1903, Mr. Nannetti asked the Postmaster General "whether
he is aware that a telegraphist named Mercer, of the Bristol Post
Office, has applied for 160 vacant postmaster ships since 1894;
whether, seeing that during these periods clerks of less service,
experience, ability and salary have been the recipients of these
positions, he will make inquiry into the case?"[320]

In July, 1899, Mr. O'Brien,[321] M. P. for Kilkenny, asked the
Secretary to the Treasury, as representing the Postmaster General,
"whether he is aware that a postman named Jackson, in Kilkenny, has
been in the Post Office service over 20 years and that his wages at
present are only 12s. per week; and whether Jackson was given the
increment of 1s. 6d. per week fixed by the new wages scale which came
into operation in April, 1897; and if not, whether he will cause
inquiry to be made into the case, with the view of giving Jackson
the wages to which he is entitled by the rules of the service?" Mr.
R. W. Hanbury, Financial Secretary to the Treasury, replied: "The
rural postman at Kilkenny to whom the Honorable Member refers was
transferred, on June 19, to another walk at that place, carrying wages
of 16s. a week. His previous duty was not sufficient to warrant higher
wages than 12s. a week."[322]

In April, 1901, Sir George Newnes, M. P. for Swansea, protested
against the promotion out of order, according to seniority, of one
A. E. Samuel, a sorter and telegraphist at Swansea.[323] Sir George
Newnes is the founder of George Newnes, Limited, proprietors _Strand
Magazine_, _Tit-Bits_, etc.; and proprietor of the _Westminster
Gazette_, the London evening newspaper of the Liberal Party.

In February and March, 1903, Mr. C. E. Schwann, M. P. for Manchester,
protested against the promotion out of order of two men at Manchester,
who had been respectively numbers 99 and 133 in their class.[324] Mr.
Schwann is President of the Manchester Reform Club, and has been nine
years President of the National Reform Union. He has held successively
the offices of Secretary, Treasurer and President of the Manchester
Liberal Association. In 1900 he was elected to Parliament by a majority
of twenty-six votes.

In July, 1902, Mr. Keir Hardie asked the Financial Secretary to
the Treasury: "Whether the overseer's vacancy in the South Eastern
Metropolitan district, created by the death of Mr. Feldwick, and
recently filled by a suburban officer, will now be restored to the
town establishment, seeing that the appointment properly belongs to
this establishment?" Mr. Austen Chamberlain replied: "The vacancy in
question has been filled by the transfer of an overseer from a suburban
office in the same postal district, but the vacancy thus created in
the suburbs has been filled by the promotion of an officer in the
town district office." In August, 1902, Mr. Keir Hardie asked the
Financial Secretary to the Treasury: "Whether he is aware that the
overseer's vacancy which occurred in the town establishment of the
South Eastern Metropolitan District by the promotion of Mr. May to an
inspectorship at another office, has been filled by the transfer of an
officer in the suburban establishment, thus diverting a town vacancy
to the suburbs; and whether, in view of the fact that the chances of
promotion in the suburban establishments are 75 per cent. better than
in the town establishment, he will cause the vacancy to be restored
to the establishment in which it originally occurred?" Mr. Austen
Chamberlain replied: "The Postmaster General is aware of the effect of
the promotion in question, and has already arranged that the balance of
promotion shall be readjusted on an early opportunity by the transfer
of a town [officer] to a suburban vacancy."[325]

[Sidenote: _A Member of the Select Committee on Post Office Servants,
1906_]

On March 24, 1905, Mr. Charles Hobhouse, M. P. for Bristol, asked the
Postmaster General "why a number of men with unblemished character
and with service ranging from 15 to 25 years have, in the recent
promotions in the Bristol Post Office, been passed over in favor of a
junior postman?" In 1906, Mr. Hobhouse was made a member of the Select
Committee on Post Office Servants.[326]

On March 15, 1906,[327] Mr. Sloan, M. P. for Belfast, intervened on
behalf of the men who had recently been passed over in the selection of
three men to act as "provincial clerks" in the Post Office at Belfast.

On the same day, Mr. Sloan asked the Postmaster General "under
what circumstances the junior head postman at Belfast is retained
permanently on a regular duty while his seniors, equally capable men,
are compelled to rotate on irregular duties with irregular hours."

On August 2, 1906, the Postmaster General, Mr. Sydney Buxton, replied
to Mr. Sloan: "I cannot review cases of promotion decided by my
predecessor eighteen months ago."

In 1905 Mr. Sloan had voted for a Select Committee on Postal Servants'
Grievances.

The foregoing quotations could be extended indefinitely, but they
illustrate sufficiently the several kinds of intervention in matters of
mere administrative detail, as well as the high political and social
standing of some of the Members of Parliament who lend themselves to
those several kinds of intervention. But these quotations may not be
brought to an end without mention of the qualifying fact that Lord
Stanley, Postmaster General from 1903 to 1905, repeatedly stated in the
House of Commons that he did "not select the senior men unless they
were best qualified to do the work."[328]

FOOTNOTES:

[273] _Third Report from the Select Committee on Civil Services
Expenditure_, 1873; q. 4,193 to 4,206, and 4,267.

[274] _Report from the Select Committee on Post Office_ (_Telegraph
Department_), 1876; q. 3,122 to 3,125.

[275] _Correspondence Relating to the Post Office Telegraph
Department_: Letter of April 12, 1877, Postmaster General, Lord John
Manners, to the Lords Commissioners of the Treasury.

[276] _Report from the Select Committee on Post Office_ (_Telegraph
Department_), 1876; q. 1,259.

[277] _Report of the Bradford Committee on Post Office Wages_, 1904; q.
1,024 and 1,048.

[278] Mr. Lowe, Chancellor of the Exchequer, divided the service into
three classes, in such a way that it was difficult, if not impossible,
to pass from one class to the other. That was done with the object of
preventing individuals from bringing pressure on Members of Parliament
for promotion from class to class.

[279] Compare also: _Third Report from the Select Committee on Civil
Services Expenditure_, 1873; q. 3,703 to 3,705, Mr. T. H. Farrer,
Permanent Secretary of the Board of Trade. "The salt of the service
is the staff appointments.... Since I have been in the Board of Trade
there have been almost forty higher staff appointments, and on not more
than four could I put my finger and say they had been made from any
other motive than the desire to get the best man. On some occasions
the good appointments have been made in the teeth of strong political
motives to the contrary."

[280] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 19,980, and 20,079 to 20,083.

[281] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 17,564.

[282] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 17,500, 20,141 to 20,149, 20,260,
20,262 and 20,338; and _First Report of the Royal Commission appointed
to inquire into the Civil Establishments_, 1887, p. 424.

[283] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 17,250 to 17,253.

[284] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 20,253.

[285] _Hansard's Parliamentary Debates_, March 1, 1887, p. 890; March
7, p. 1,400; May 12, p. 1,723; and April 4, p. 456.

[286] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,152 to 12,154, Mr. H. Joyce, Third
Secretary to General Post Office. Compare also: q. 131 and 7,891, and
Appendix, p. 1,068.

Extract from the "Postmaster's Book of Instructions," p. 105.
"Except to clerkships of first class, all promotions from class to
class, whether in the Major or Minor Establishments, are governed by
seniority, combined with full competency and good character. Thus,
on a vacancy occurring in a higher class, not being the first class
of clerks, recommend for promotion that officer of highest standing
[according to seniority] in the class next below who is qualified
for the efficient performance of the duties of the higher class, and
has conducted himself with diligence, propriety and attention in his
present class to your satisfaction. If on the other hand you feel
it incumbent on you to recommend some officer other than the one of
highest standing [according to seniority] in his class, furnish a
tabular statement after the following specimens, giving the names
and dates of appointment of those you propose to pass over, and your
reasons. These reasons must be stated with precision in the column set
apart for observations. Such entries as: 'Scarcely qualified,' 'has not
given satisfaction,' being insufficient in so important a matter."

[287] _Who's Who_, 1905, Fowler, Rt. Hon. Sir H. H., M. P. (L.),
Wolverhampton, 1880 to 1900, and since 1900; Under Secretary Home
Department, 1884-85; Financial Secretary to Treasury, 1886; President
Local Government Board, 1892-94; Secretary of State for India, 1894-95.

[288] _Hansard's Parliamentary Debates_, April 27, 1900, p. 128, Sir H.
H. Fowler, and Mr. R. W. Hanbury.

[289] Mr. Fawcett, Postmaster General.

[290] Mr. Arnold Morley, Postmaster General, 1892-95; Chief Liberal
Whip, 1886-1892.

[291] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,220.

[292] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,158. Compare, for example, _Hansard's
Parliamentary Debates_, September 18, 1893. Mr. A. Morley, Postmaster
General, states that 10 men had been passed over, after having been
found wanting upon a trial on higher duties. He added: "I am, however,
making further inquiries."

[293] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,180, and Appendix, p. 1,110.

[294] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,205.

[295] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,184 and 12,185.

[296] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,230 and 12,239.

[297] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,182 and 5,629.

[298] _Hansard's Parliamentary Debates_, March 31, 1883, p. 55.

[299] _Hansard's Parliamentary Debates_, June 6, 1887, p. 1,081 and
following.

[300] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 5,603 and 12,160 to 12,162.

[301] _Report of the Inter-Departmental Committee on the Post Office
Establishments_, 1897; q. 6,983.

[302] _Report of the Inter-Departmental Committee on the Post Office
Establishments_, 1897; Mr. J. G. Uren, President Postmasters'
Association; q. 12,493 and following; and Mr. E. B. L. Hill, Assistant
Secretary General Post Office; q. 15,450.

[303] "But I do not think I ought to conceal the fact that the majority
of our members are the postmasters of small and medium sized places
who have very likely got, according to our ideas, more grounds for
grievance than the postmasters of larger towns."

[304] That the peculiar demands and ideals described in these chapters
are by no means confined to the Post Office employees, is shown
by the subjoined quotation from a Treasury Minute of March, 1891,
relative to an Inquiry by the Chancellor of the Exchequer, and the
Financial Secretary to the Treasury into the Administration of the
Outdoor Department of the Customs Revenue Department, to wit: "Besides
the alleged loss of promotion through a reduction in the higher
appointments, and the various arrangements by which they considered
that they were injured in their emoluments or as to the hours of
working, the officers of all grades complained of the existing system
of promotion. They contended that it was unfair and fortuitous in its
operation, and did not pay sufficient regard to seniority."--_Report of
the Inter-Departmental Committee on the Post Office Establishments_,
1897; q. 12,577.

[305] _Report of the Inter-Departmental Committee on the Post
Office Establishments_, 1897. Testimony of the representatives of
the Postmasters' Association: Mr. J. G. Uren, Mr. W. E. Carrette
(Queenstown), Mr. John Macmaster; and Appendix, p. 1,127.

[306] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, Mr. Joseph Shephard; q. 3,117 to 3,126, and
testimony of Mr. J. C. Badcock, Controller London Postal Service.

[307] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 1,614.

[308] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 15,219, Mr. Lewin Hill, Assistant Secretary
General Post Office, London; and 5,290, Mr. Jas. Green.

[309] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 15,217, Mr. Lewin Hill, Assistant Secretary
General Post Office, London; and 5,282 to 5,284, Mr. Jas. Green.

[310] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 15,097, Mr. W. H. Preece, Engineer-in-Chief
at the Post Office; and 4,876, Mr. E. J. Tipping.

[311] _Who's Who_, 1905.

[312] _Hansard's Parliamentary Debates_, March 23, 1903, p. 1,464; and
May 7, 1903, p. 27.

[313] _Hansard's Parliamentary Debates_, April 9, and May 12, 1904, p.
1,239 and 1,246 to 1,268.

[314] _Hansard's Parliamentary Debates_, March 16, 1903, p. 856.

[315] _Report of the Inter-Departmental Committee on the Post Office
Establishments_, 1897; q. 3,214 and 4,206.

[316] _Hansard's Parliamentary Debates_, March 10, 1887, p. 1,733.

[317] _Hansard's Parliamentary Debates_, April 24, 1902, p. 1,189.

[318] _Hansard's Parliamentary Debates_, March 9, 1903, p. 113.

[319] _Hansard's Parliamentary Debates_, April 7, 1903, p. 1,242.

[320] _Hansard's Parliamentary Debates_, February 24, 1903, p. 670.

[321] _Who's Who_, 1905, O'Brien, P., M. P. since 1886; mechanical and
marine engineer. In 1895 Mr. O'Brien had been elected to Parliament by
a majority of fourteen votes.

[322] _Hansard's Parliamentary Debates_, July 3, 1899.

[323] _Hansard's Parliamentary Debates_, April 22, 1901, p. 919.

[324] _Hansard's Parliamentary Debates_, February 25, 1903, p. 803; and
March 9, 1903, p. 108.

[325] _Hansard's Parliamentary Debates_, July 10, 1902, p. 1,359; and
August 8, 1902, p. 1,102.

[326] _Who's Who_, 1905, Hobhouse, C. E. H., M. P. (R.), East Bristol
since 1900; Recorder of Wills since 1901. Education: Eton; Christ
Church, Oxford. M. P. (L), East Wilts, 1892-95; private secretary at
Colonial Office, 1892-95; County Alderman, Wilts, 1893 to present time.
Clubs: Brooks', Naval and Military.

[327] _Hansard's Parliamentary Debates_, March 15, 1906.

[328] _Hansard's Parliamentary Debates_, April 28, 1904, p. 1,428;
April 14, and May 12, 1904, p. 1,253.

CHAPTER XVI

MEMBERS OF THE HOUSE OF COMMONS INTERVENE ON BEHALF OF PUBLIC SERVANTS
WHO HAVE BEEN DISCIPLINED

Evidence presented before: The Royal Commission appointed
to inquire into the Civil Establishments, 1888; and the
Tweedmouth Committee, 1897. Instances of intervention by
Members of Parliament. Mr. Austen Chamberlain, Financial
Secretary to the Treasury, in April, 1902, states that at a
low estimate one-third of the time of the highest officials in
the Post Office is occupied with petty questions of discipline
and administrative detail, because of the intervention
of Members of Parliament. He adds that it is "absolutely
deplorable" that time and energy that should be given to the
consideration of large questions must be given to matters that
"in any private business would be dealt with by the officer
on the spot." Sir John Eldon Gorst's testimony before the
Committee on National Expenditure, 1902.

[Sidenote: _M. P.'s and the Rank and File_]

In 1888, Mr. Harvey, a Member of the Royal Commission appointed to
inquire into the Civil Establishments, asked Sir S. A. Blackwood,
Secretary to the Post Office since 1880: "Now I should like to ask
you ... whether you consider there is a distinct tendency among the
clerical establishments [_i. e._, the clerks above the rank and file],
especially the lower division clerks, to develop what for want of a
better term I will call trades union spirit?" "Yes, I believe there
is a good deal of evidence of that." "Have you, yourself, found it
difficult to deal with that; is it a factor in your administration
[of the Post Office]?" "Not with regard to the lower division clerks
[above the rank and file]; it is with regard to the subordinate ranks
of the service, the rank and file; amongst them there is a very
strong tendency in that direction." "A growing tendency?" "It is
certainly growing." "A growing tendency then we may say to introduce
the coöperation of Members of Parliament to deal with individual
grievances?" "A very strongly growing tendency." At this point
Mr. Lawson interrupted: "Individual or class grievances?" "Class
grievances, but there are a great many instances in which individual
grievances are brought forward [by Members of Parliament]." "The
point of the question was whether this spirit of trades unionism was
evoked for the sake of bringing forward individual grievances, and
you said yes; and then I asked whether it was class grievances or
individual grievances?" "I mean class grievances, but it is made use
of in respect of individual grievances." Mr. Harvey resumed: "And you
think it is growing?" "I think it is strongly growing." "So we may
say, to repeat the question I put just now, that it makes a factor
in your administration of the Post Office, and you have always to be
prepared to meet this growing tendency?" "It is continuously raising
difficulties, and very serious ones."

Mr. Lawson queried: "You said something about trades unionism; do you
think it is possible by any regulation to stop trades unionism of a
great class such as the senior division, or the classes which are the
subordinate part of your establishment?" "I think it would be very
difficult." "You would have to reckon with that as a permanent factor?"
"Yes."[329]

This intervention on behalf of individual employees is managed as
follows. Members of Parliament first interview the Postmaster General;
if they fail to obtain satisfaction, they bring the grievance of
their constituent before the House of Commons, by means of a question
addressed in the House to the Postmaster General. It will be remembered
that Mr. Hanbury, Financial Secretary to the Treasury, in 1900 stated
that he had agreed to represent the Postmaster General in the House
of Commons only on condition that he should be given full freedom to
answer such questions in any way he saw fit, and that he should not be
bound by any answers furnished him either by the permanent officers
of the Post Office or by the Postmaster General. And that Sir H. H.
Fowler protested against the Postmaster General sitting in the House of
Lords, on the ground that the questions asked by Members of the House
of Commons often demanded to be answered by a man who had his finger
on the pulse of the House, and was able to cut through the red tape of
officialism on public grounds, which meant, to set aside the rules of
the Department in response to the exigencies of political expediency.

If the answer given by the Postmaster General is unsatisfactory,
the Member of Parliament gives notice that he will bring the matter
up again on the discussion of the Estimates of Expenditure. In the
meantime he brings to bear, behind the scenes, what pressure he can
command. And he often learns to appreciate the grim humor of the reply
once given by a former Minister of Railways in Victoria, Australia,
to a Victorian Royal Commission, to the query whether political
influence was exercised in the administration of the State railways of
Victoria. The reply had been: "I should like to know how you can have a
politician without political influence?"

Of course not all cases of intervention by Members of Parliament are as
successful as was the intervention of Mr. Bradlaugh, which resulted in
the promotion of eleven men out of fourteen who had been passed over
as "not qualified for promotion," or, as was the intervention of the
Member of Parliament whose name was not revealed, which brought about
the revocation of the promotion of the ablest man in the Post Office
at Sheffield. Indeed, the principal effect of these interventions is
not to force the Post Office to retrace steps already taken, it is to
prevent the Post Office from taking certain steps. These interventions
modify the entire administration of the British Post Office. They
compel the Postmaster General and his leading officers to consider the
political aspect of every proposal coming from the local postmasters,
and other intermediate officers, be it a proposal to promote, to
pass over, to discipline, or to dismiss. It was this possibility of
intervention by Members of Parliament, acting under pressure from
civil servants' unions, that gave the late Mr. Fawcett "a perfect
horror of passing over," that caused Mr. Arnold Morley "the greatest
distress" whenever he had to pass anyone over, and that led Mr. Raikes
to state in the House of Commons, that, "in the interests of the Public
Service, and especially in the interests of the Post Office itself,"
he had declined to follow the advice of his officers that he promote
a certain clerk in the Secretary's Office; as well as that he made it
his practice to try to mitigate the rules of the Department governing
punishment and dismissal. It was with the thought of Parliamentary
intervention in mind, that Mr. Austen Chamberlain,[330] Postmaster
General, said, in February, 1903: "The selection of officers for
promotion is always an invidious task."

* * * * *

[Sidenote: _Typical Grievances_]

The testimony given before the Tweedmouth Committee, 1897, contains a
number of incidents which show how leniently the Post Office Department
is obliged to deal with men who violate the rules. These incidents were
brought before the Committee by the representatives of the employees
of the Post Office, for the purpose of proving by individual cases,
that the Department's rulings were unduly severe, and afforded just
cause for grievance.

One Webster, a letter carrier at Liverpool, in July, 1883, failed to
cover his whole walk, and brought back to the office, letters which
he should have delivered. These letters he surreptitiously inserted
among the letters of other carriers. Mr. Herbert Joyce, Third Secretary
to General Post Office, said dismissal would not have been harsh
punishment for the offence; but Webster was merely deprived of one
good conduct stripe, worth 25 cents a week. In 1884 and 1885 Webster's
increment of salary was arrested for unsatisfactory conduct. In July,
1886, Webster was removed from his walk, and reduced to the "junior
men" on the "relief force," for having been under the influence of
drink while on duty. In 1890, Webster complained to headquarters of
harsh treatment, stating that though he had served 15 years, he had not
received three good conduct stripes. And in 1896, Mr. J. S. Smith, the
official representative of the provincial postmen, deemed it expedient
to cite the case to the Tweedmouth Committee in the course of an
argument to the effect that there was too great a difference "between
the punishment meted out to postmen and the punishment meted out to
sorters; not that I say the punishment is too slight for sorters, but
it is, I might say, too severe for postmen," It may be added that, in
1896, Webster was recommended for three good conduct stripes, though
the regulation says that a good conduct stripe shall be awarded only
for five clear and consecutive years of good conduct. Non-observance
of that regulation led the Tweedmouth Committee to report: "The
practice which has grown up in the Department of awarding two stripes
at the same time to a man whose service exceeds 10 years, but whose
unblemished service extends over only 5 years, is, we think, a bad one,
and should be discontinued."[331]

The foregoing recommendation of the Tweedmouth Committee was not
endorsed by the Government. On March 13, 1906, the Postmaster General,
Mr. Sydney Buxton, in reply to Mr. Thomas Smyth, M. P., who was
intervening on behalf of one Thomas Reilly, said: "I find that Thomas
Reilly would have been entitled to an increase of one shilling and
six pence a week in his wages as from April 1, 1905, if his conduct
during the preceding twelve months had been satisfactory. Unfortunately
the necessary certificate to that effect could not be given, but the
question of granting the increase to Reilly will come up again for
consideration shortly.... It will be necessary to postpone for a time
the award of a second stripe."[332]

In October, 1895, one Roberts, an auxiliary postman was warned that he
would be dismissed unless his conduct improved. He had been reported
for "treating parcel receptacles in a rough and reckless manner, and
smashing the parcels." In November, 1895, he altered the address on a
parcel in order to save himself the trouble of delivering the parcel
on the day on which he made the alteration. The parcel was given
to a carrier on another route, who returned it as not deliverable.
After some delay the parcel finally was delivered by Roberts. When
Mr. S. Walpole, Secretary of the Post Office, heard this testimony,
he exclaimed: "And was Roberts dismissed on the spot?" Mr. Badcock,
Controller London Postal Service, replied: "No. The overseer described
him as totally unreliable, and he was warned for the last time." Mr.
Walpole continued: "Why was he not dismissed?" Mr. Badcock replied:
"Well, he ought to have been." In January, 1896, Roberts was again
cautioned; on February 24, 1896, he failed to attend his morning duty;
and he was seriously cautioned again. In March, 1896, he was guilty
of "gross carelessness," and was told to look for other employment.
Thereupon Roberts wrote his postmaster that he was a member of the
Postmen's Federation. Shortly afterward, Mr. Churchfield, Secretary of
the Postmen's Federation, brought Roberts' case before the Tweedmouth
Committee, alleging that the Post Office Department had dismissed
Roberts because he had supplied evidence to the representatives of the
postal employees who had appeared before the Tweedmouth Committee.[333]

In 1878, one Woodhouse, a postman at Norwich, was suspended for two
days for irregular attendance, having been late 42 times in three
months. In 1880, he was suspended for three days, having been late 173
times during the year. Woodhouse also had been very troublesome to the
inspector, setting a bad example to the younger men. In 1882, he was
absent from duty because of intoxication, was grossly insubordinate
to the local postmaster, whom he set at defiance, and also grossly
insubordinate to the surveyor. The local postmaster recommended that
he be dismissed. "At headquarters, however, with a large, and some
people think a very undue, leniency, it was decided to give him one
more trial." In 1889, Woodhouse was cautioned by the postmaster
for insubordinate conduct to the inspector. In 1891 and 1892, the
postmaster refused to recommend him for good conduct stripes. In 1894
there was a marked improvement in Woodhouse's conduct. The improvement
was maintained, and in 1896, Woodhouse was recommended for good conduct
stripes. Of this man, Mr. J. S. Smith, the official representative of
the provincial postmen, said, in 1896, before the Tweedmouth Committee:
"The last 17 or 18 years of Woodhouse's career have been of a most
exemplary description, a good time-keeper and zealous in the discharge
of his duties, and yet, though he had been a postman for 25 years, he
has never been the recipient of a good conduct stripe. By this means
he has been deprived of about $450, truly a great loss for a postman
to suffer through having this vast sum deducted from his wages. It
needs no words of mine to point out the great injustice that has
been inflicted upon Woodhouse. Any little irregularity that may have
occurred (such as bad time-keeping, which is admitted) in the first 7
or 8 years of his service, has been amply atoned for by 17 or 18 years'
punctuality and excellent behavior."[334]

In November, 1895, a letter carrier at Manchester came "under the
influence of drink," and reached at 3.50 p. m. a point in his walk
which he should have reached at 2.30 p. m. "On the following day he was
again under the influence of drink and unfit to make his delivery." The
punishment was the deprivation of one good conduct stripe.[335]

In December, 1895, a postman at Newcastle, while off duty, but in
uniform, "was reeling along [one of the principal streets] intoxicated
at 3 p. m." The case was sent up to the Postmaster General, who decided
that the man should lose one good conduct stripe. Mr. Spencer Walpole,
a member of the Tweedmouth Committee, and the Permanent Secretary
to the Post Office, said dismissal would not have been too severe a
punishment; and Mr. H. Joyce, Third Secretary General Post Office,
London, assented to the statement.[336]

Mr. Badcock, Controller London Postal Service, in replying to the
testimony of Mr. A. F. Harris, the official representative of the
London postmen, said that it was true that while one Worth for some
years past had off and on been made an acting head postman, he had
not been recommended for promotion to the position of head postman,
because his postmaster had reported that he was "shifty, unreliable,
and careless." Mr. Walpole, Secretary of the Post Office, thereupon
queried: "Is that not a reason for not employing him to act as head
postman?" Mr. Badcock replied: "It was thought better to give him a
chance, instead of letting him have the grievance of complaining that
he had not had an opportunity of showing whether he was qualified." Mr.
Walpole continued: "But if he showed himself shifty, unreliable, and
careless for several years, ought not his trial as a head postman to
cease?" Mr. Badcock replied: "I must confess that I think so."[337]

In February, 1887, Mr. Marum intervened in the House of Commons on
behalf of one Ward, a telegraphist, who had been dismissed in 1876
because he had discharged his duties unsatisfactorily.[338]

In February, 1888, Mr. Lawson, a Member of the Royal Commission
appointed to inquire into the Civil Establishments, intervened on
behalf of one Harvey, a letter carrier who had been dismissed in
1882.[339]

In March, 1901, Mr. Bartley[340] intervened on behalf of one Canless,
who had been dismissed because the Postmaster General "was of the
opinion that Mr. Canless was not a fit person to be retained in the
service." On dismissing the man, the Post Office had deducted from his
pay the value of a postal money order--$2.25--alleged to have been
stolen by him.[341] Canless' case was brought up again in August,
1904, upon the occasion of the debate upon the Report of the Bradford
Committee.

In July, 1897, Mr. C. Seale-Hayne intervened on behalf of one J. C.
Kinsman, dismissed for insubordination and delegation of his duties to
unauthorized persons.[342]

In August, 1903, Mr. Sloan, M. P. for Belfast, intervened on behalf of
one Templeton, of the Belfast Post Office, dismissed for emptying ink
on the head of a workman engaged in the Post Office.[343]

In March, 1905, Mr. John Campbell, M. P., tried to induce the
Postmaster General to reopen the case of one M'Cusker, who had been
disciplined in 1897.[344]

In April, 1899, Mr. Lenty asked for a pension for one Wright, whose
"conduct had been such as to render him unfit for further employment in
the public service."[345]

In August, 1902, Mr. Crean asked for a pension for W. H. Allshire, "Who
was reported for certain irregularities for which he would probably
have been dismissed. While the matter was under consideration he sent
in his resignation, which was accepted."[346]

In August, 1903, Mr. L. Sinclair intervened on behalf of B. J. Foreman,
"who was not qualified for the award of a pension, as he was neither 60
years of age nor incapacitated from the performance of his duty" when
his service was terminated.[347]

In March, 1891, Earl Compton intervened on behalf of a first class
sorter who had been reduced to the second class after having been
sentenced to a fine by a Police Magistrate.[348]

In December, 1893, Mr. Keir Hardie asked the

Postmaster General to modify the rules governing fines for being late
at duty. In February, 1899, Mr. Maddison made a similar request.[349]

In October, 1902, Mr. Palmer intervened on behalf of some "learners"
at Reading, who had been punished "for careless performance of their
duties, leading to serious delay in the delivery of telegrams."[350]
Mr. Palmer, a biscuit manufacturer, was the Member for Reading. In the
past he had been an Alderman as well as the Mayor of Reading.

In July, 1901, Mr. Groves intervened on behalf of a postman at
Manchester from whom annual increments of pay had been withheld under
the rules governing irregular attendance.[351] Mr. Groves is Chairman
of the South Salford Conservative Association.

In April, 1900, Mr. Steadman said: "I honestly admit that this
question business might be overdone; but at the same time, if anyone,
postman or anyone else, thinks I can do his case any good by putting
down a question, I shall always do so as long as I am a Member of this
House." Mr. Steadman proved as good as his boast; and in July, 1900,
he intervened on behalf of a man from whom the Post Office Department
had withheld two good conduct stripes "because he had absented himself
frequently on insufficient plea of illness." Mr. Steadman stood ready
to shield any malingerer who might apply to him, though malingering is
a serious evil in the Post Office service. For example, in 1901 the
average number of days' absence on sick-leave was 7.6 days for the men
in that part of the staff that receives full pay during sick-leave, as
against 5.2 days for the men in that part of the staff that receives
only half-pay during sick-leave.[352] Mr. Steadman had been elected to
Parliament by a majority of 20 votes. He is at present a Member of the
London County Council.[353]

In June, 1906, Mr. Sydney Buxton, who had become Postmaster General,
upon the formation of the Sir Henry Campbell-Bannerman Ministry, in
December, 1905, expressed himself as follows:[354] "He was informed
a little while ago by his private secretary that in the ordinary way
60 or 70 applications of various sorts were made by honorable Members
in the course of a calendar month, but that for some months past, in
consequence perhaps of there being a new Government, a new Parliament,
new Members, and a new Postmaster General, the number of applications
of all sorts had amounted to between 300 and 400 per month."

[Sidenote: _A Member of the Select Committee on Post Office Servants,
1906_]

In May, 1906, Mr. J. Ward, a Member of the Select Committee on
Post Office Servants, 1906, asked the Postmaster General "whether
his attention had been called to the dismissal of E. C. Feasey, of
Walsall, who had been an efficient officer in the postal service
for 17 years ... and whether he will reconsider the question of the
man's reinstatement?" Mr. Buxton replied: "I have looked into the
circumstances connected with the dismissal by my predecessor of E. C.
Feasey, formerly a town postman at Walsall. I find that Feasey had
a most unsatisfactory record.... I am not prepared to consider the
question of reinstatement."[355]

In March, 1906, the Postmaster General, in reply to Mr. Nannetti,
M. P., said: "The Reports and statements in the Corcoran case were
fully considered at the time [1901], and I can see no good purpose in
reopening the matter after a lapse of five years."[356]

In April, 1906, Mr. Wiles,[357] M. P., intervened on behalf of the
head messenger in the Secretary's Office at the General Post Office,
London. Under the administration of Lord Stanley, Postmaster General,
an allowance of 4 shillings a week given the head messenger at the time
of his appointment, had been withheld from October, 1900, to October,
1905. Mr. Sydney Buxton replied: "I have already had this case under my
consideration. The allowance of 4 shillings a week is being granted,
but unfortunately the allowance cannot be made retrospective."

Mr. Wiles had been elected to Parliament in January, 1906, having
defeated Sir Albert K. Rollit, who, for many years, had made a
specialty of championing the cause of Post Office employees who had a
grievance.

* * * * *

[Sidenote: _Deplorable Waste of Executive Ability_]

In April, 1902, Mr. Austen Chamberlain, Financial Secretary to the
Treasury, and representative in the House of Commons of the Postmaster
General, the Marquis of Londonderry, said: "In a great administration
like this there must be decentralization, and how difficult it is to
decentralize, either in the Post Office or in the Army, when working
under constant examination by question and answer in this House, no
honorable Member who has not had experience of official life can easily
realize. But there must be decentralization, because every little petty
matter cannot be dealt with by the Postmaster General or the Permanent
Secretary to the Post Office. Their attention should be reserved in
the main for large questions, and I think it is deplorable, absolutely
deplorable, that so much of their time should be occupied, as under the
present circumstances it necessarily is occupied, with matters of very
small detail, because these matters of detail are asked by honorable
Members, and because we do not feel an honorable Member will accept an
answer from anyone but the highest authority. I think a third of the
time--I am putting it at a low estimate--of the highest officials in
the Post Office is occupied in answering questions raised by Members of
this House, and in providing me with information in order that I may
be in a position to answer the inquiries addressed to me" concerning
matters which, "in any private business, would be dealt with by the
officer on the spot, without appeal or consideration unless grievous
cause were shown."[358]

In March, 1903, Mr. Austen Chamberlain, Postmaster General, read
the following Post Office Rule: "A postmaster is to address to his
surveyor, and a subordinate officer is to address to the postmaster
(who will forward it to his surveyor), any application from himself
having reference to his duties or pay, or any communications he may
desire to make relating to official matters; and if the applicant is
dissatisfied with the result he may appeal direct to the Postmaster
General. But it is strictly forbidden to make any such application or
other communication through the public, or to procure one to be made by
Members of Parliament, or others; and should an irregular application
be received, the officer on whose behalf it is made will be subject to
censure or punishment proportionate to the extent of his participation
in the violation of the rule." Mr. Chamberlain added: "But it has been
my practice [as well as that of Mr. Chamberlain's predecessors] to
treat the rule as applying only to applications so made in the first
instance, and I have raised no objection to an officer who had appealed
to me, and was dissatisfied with my decision, applying subsequently to
a Member of Parliament."[359]

* * * * *

The Post Office is not the only British Department of State which is
obliged to consider with care how far it may go counter to individual
interests in enforcing rules and standards adopted for the preservation
of the public interest.

Before the Select Committee on National Expenditure, 1902, Sir John
Eldon Gorst, M. P., and Vice-President of the Committee of Council
on Education, 1895 to 1902, said: "What I want to impress upon the
Committee is that Parliament has never an influence which goes for
economy of any kind in the expenditure of public money on education
[about $40,000,000 a year]. Then I hope I have now shown the Committee
that the only security the public has that what it spends will be
efficiently spent is the system of inspection. Earlier in my evidence
I also pointed out the two systems which are in vogue for inspection,
namely the South Kensington system and the Whitehall system. The
Whitehall system, which deals with the larger amount of public money,
is extremely inefficient. The Elementary Education Inspectors have
before their eyes the fear, first of all, of the managers of the
schools which they visit. The managers of the schools are often
important School Boards like the School Board of London, which is not
a body to be trifled with, which has very great influence, both in
Parliament and in the Education Department, and which the Inspectors
are very much afraid of offending. But it is not only powerful School
Boards, but any managers [of schools] can take the matter up. If an
Inspector goes into a school and sees [reports] that the children are
dirty, or that the school is dirty, or that the teacher is inefficient,
the manager is up in arms at once, and writes a letter to the Board of
Education, and comes up and sees the Secretary, and protests against
the Inspector for having dared to make an unfavorable report of his
or her school. Besides that, the Inspectors have before their eyes
the fear of the National Union of Teachers. Almost every teacher now
is a member of the National Union of Teachers, and if an Inspector is
supposed to be severe, a teacher complains at once to the National
Union, and the case is taken up, possibly even in Parliament, by some
of the officials of the National Union of Teachers in Parliament, and
it is made very uncomfortable for the Inspector. Then, lastly, they
[_i. e._, the Inspectors] have the office--that is not, say, their own
Chief Inspector, but the officials of the office, who do not like an
Inspector who makes trouble. The great art of an Inspector is to get
on well with the managers [of schools] and teachers, and to make no
trouble at all. I have known cases of adverse reports which were not
liked at the office being sent back to the Inspector to alter," not by
the Chief Inspector, or Senior Inspector of the District, but by some
other person in the office.[360]

Sir John Eldon Gorst was Solicitor-General in 1885-86, Under Secretary
for India in 1886 to 1891, Financial Secretary to the Treasury in
1891-92, Deputy Chairman of Committees of the House of Commons in 1888
to 1891, and Vice-President of Council on Education in 1885 to 1902. He
was a Member of the House of Commons in 1866 to 1868, and has been a
member continuously since 1875. Since 1892 he has sat as representative
of the University of Cambridge.

Sir John Eldon Gorst was by no means unwilling to take his share of
blame for the mismanagement in the various Departments of State arising
out of the intervention of the House of Commons--under pressure from
the constituencies, or organized groups in the constituencies--in
the administrative details of the Departments of State. He said: "I
have been as great a sinner as anyone in the days when I represented
Chatham,[361] before I was a Member of the Government; I was
perpetually urging the Secretary of the Admiralty for the time being to
increase the expenditures at the dockyards"[362] [in the interest of
the laborers in the dockyards and of the merchants and manufacturers
who have raw materials to sell to the dockyards].

FOOTNOTES:

[329] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; Sir S. A. Blackwood, Secretary to the
Post Office since 1880; q. 17,821 to 17,827.

[330] _Hansard's Parliamentary Debates_, February 25, 1903, p. 803.

[331] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, p. 19; q. 9,132 and following, Mr. J. S. Smith;
and q. 12,366, Mr. H. Joyce, Third Secretary to the General Post Office.

[332] _Hansard's Parliamentary Debates_, March 13, 1906.

[333] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. Churchfield, Secretary Postmen's Federation;
q. 10,994 and following; and Mr. J. C. Badcock, Controller London
Postal Service; q. 11,585 to 11,589.

[334] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. H. Joyce, Third Secretary to General Post
Office; q. 12,316; and Mr. J. S. Smith; q. 9,063.

[335] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. H. Joyce, Third Secretary General Post
Office; q. 12,374; and Mr. J. S. Smith; q. 9,115.

[336] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. H. Joyce, Third Secretary General Post
Office; q. 12,356 to 12,360; and Mr. J. S. Smith, representative of the
provincial postmen; q. 9,108.

[337] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 11,485 and following, and 9,187 and following.

[338] _Hansard's Parliamentary Debates_, February 14, 1887, p. 1,399.

[339] _Hansard's Parliamentary Debates_, February 24, 1888, p. 1,375.

[340] _Who's Who_, 1905, Bartley, Sir G. C. T., K. C. B., cr. 1902;
M. P. North Islington since 1885; Assistant Director of Science
Division of Science and Art Department till 1880; resigned to stand for
Parliament; established National Penny Bank to promote thrift, 1875.

[341] _Hansard's Parliamentary Debates_, March 15, 1901, p. 84.

[342] _Hansard's Parliamentary Debates_, July 27, 1897, p. 1,221.

[343] _Hansard's Parliamentary Debates_, August 13, 1903, p. 1,160.

[344] _Hansard's Parliamentary Debates_, March 9, 1905, p. 397.

[345] _Hansard's Parliamentary Debates_, April 27, 1899, p. 711.

[346] _Hansard's Parliamentary Debates_, August 1, 1902, p. 395.

[347] _Hansard's Parliamentary Debates_, August 5, 1903, p. 1,528.

[348] _Hansard's Parliamentary Debates_, March 13, 1891.

[349] _Hansard's Parliamentary Debates_, December 7, 1893, p. 633; and
February 24, 1899, p. 443.

[350] _Hansard's Parliamentary Debates_, October 27, 1902, p. 797.

[351] _Hansard's Parliamentary Debates_, July 18, 1901, p. 840.

[352] _Hansard's Parliamentary Debates_, April 27, 1900, p. 206; July
23, p. 1,468; and Mr. Austen Chamberlain, Postmaster General, April 30,
1903, pp. 1,024 and 1,035.

[353] _Who's Who_, 1905.

[354] _Hansard's Parliamentary Debates_, June 21, 1906, p. 397.

[355] _Hansard's Parliamentary Debates_, May 21, 1906, p. 938.

[356] _Hansard's Parliamentary Debates_, March 20, 1906, p. 198.

[357] _Hansard's Parliamentary Debates_, April 5, 1906, p. 705.

[358] _Hansard's Parliamentary Debates_, April 2, 1902.

[359] _Hansard's Parliamentary Debates_, March 12, 1903, p. 564.

[360] _Report from the Select Committee on National Expenditure_, 1902;
q. 2,430 _et passim_.

[361] 1875 to 1885.

[362] _Report from the Select Committee on National Expenditure_, 1902;
q. 2,502.

CHAPTER XVII

THE SPIRIT OF THE CIVIL SERVICE

The doctrine of an "implied contract" between the State
and each civil servant, to the effect that the State may
make no change in the manner of administering its great
trading departments without compensating every civil servant
however remotely or indirectly affected. The hours of
work may not be increased without compensating every one
affected. Administrative "mistakes" may not be corrected
without compensating the past beneficiaries of such
mistakes. Violation of the order that promotion must not
be mechanical, or by seniority alone, may not be corrected
without compensating those civil servants who would have
been benefitted by the continued violation of the aforesaid
order. The State may not demand increased efficiency of its
servants without compensating every one affected. Persons
filling positions for which there is no further need, must
be compensated. Each civil servant has a "vested right" to
the maintenance of such rate of promotion as obtains when he
enters the service, irrespective of the volume of business or
of any diminution in the number of higher posts consequent
upon administrative reforms. The telegraph clerks demand that
their chances of promotion be made as good as those of the
postal clerks proper, but they refuse to avail themselves of
the opportunity to pass over to the postal side proper of
the service, on the ground that the postal duties proper are
more irksome than the telegraph duties. Members of Parliament
support recalcitrant telegraph clerks whom the Government is
attempting to force to learn to perform postal duties, in
order that it may reap advantage from having combined the
postal service and the telegraph service in 1870. Special
allowances may not be discontinued; and vacations may not
be shortened, without safeguarding all "vested interests."
Further illustrations of the hopelessly unbusinesslike spirit
of the rank and file of the public servants.

Upon a preceding page has been mentioned the contention of the civil
servants that there is an implied contract between the State and the
Civil Service that the conditions of employment obtaining at any
moment shall not be changed to the disadvantage of the civil servants,
except upon payment of compensation to all persons disadvantageously
affected; and that unless such compensation is paid, any change in the
conditions and terms of employment must be limited to future entrants
upon the service of the State, or to persons who shall accept promotion
on the express condition of becoming subject to the altered terms of
employment.

[Sidenote: _Implied Contract for Six Hour Day_]

Before the Select Committee on Civil Services Expenditure, 1873, Mr.
W. E. Baxter, Financial Secretary to the Treasury, said: "I am not an
advocate for long hours; and in the mercantile business with which I am
connected, I have years ago reduced the hours both of the clerks and of
the workmen, but I am inclined to think the six hours given to their
work by the Government officials [that is, Upper and Lower Division
clerks], rather too short a period, and that it might with advantage
be somewhat lengthened. At the same time we must always keep in mind
that the effect of lengthening the hours would be to cause an immediate
demand for an increase of pay. However I have a very strong impression
that in most of the Government offices there are too many clerks, and
that there might be considerable economy in a reduction of numbers and
an increase of hours."

The Chancellor of the Exchequer stated to the Committee that it would
be inexpedient to try to raise the hours of clerks from 6 hours to,
say, 7 hours. He said: "I suspect that my one-seventh more time would
be more than compensated by my having to pay them a great deal more
than one-seventh more salary; and I think it would be very perilous to
take up the floodgates in that way."[363]

Before the Royal Commission appointed to inquire into the Civil
Establishments, 1888, Sir Reginald E. Welby, Permanent Secretary to
the Treasury, stated that he was in favor of extending the hours of
the Upper and Lower Division clerks from 6 hours to 7. The Chairman
queried: "But can it be done with existing clerks without a breach
of faith?" Sir R. E. Welby replied: "With regard to Lower Division
clerks, it is provided that in consideration of an extra payment, which
is according to the regulation, a 6 hour office can be turned into a
7 hour office.... There is no provision of that kind for the Upper
Division, and, of course, any change would have to be made a matter
of consideration.... The arrangement made between the authorities
of the Inland Revenue and the Treasury, in those departments of the
Inland Revenue which have adopted the 7 hours system, has been that
the clerks who were under no stipulation to do 7 hours' work, should
have an extra allowance until promotion. As soon as they are promoted
to another class, we have assumed that we have the right to put our
conditions upon the promotion, and, therefore, from that time they fall
into the ordinary scale of salary without addition." At this point Mr.
H. H. Fowler, a Member of the Commission, queried: "I understand you to
say there is no provision made for altering the period of service of an
Upper Division clerk from 6 hours to 7 hours. I want to know where is
the document by which the State binds itself over to accept 6 hours'
work ...?" "Nowhere. The only thing is that when he enters the office
he is told that the hours are from 10 to 4, or from 11 to 5." Mr.
Fowler continued: "I consider this is a question of vital importance,
and I want to have it very distinctly from you: I want to know where
is the contract between the State and any Upper Division clerk in any
department, that he is only to work 6 hours a day?" "There is no such
document that I know of, and no such understanding further than the
statement upon his entering the office that the hours are such and
such." "But I want to ascertain whether there would be even an approach
to a breach of faith (if such a term may be used) if the State says:
'We insist upon our servants working for us 7 hours a day?'" "None in
my mind, and I may add that it is generally known that the hours are so
and so, but longer hours when required" [on exceptionally busy days].

To Sir T. H. Farrer, Permanent Secretary to the Board of Trade, 1867
to 1886, the Chairman of the Royal commission said: "What is your view
with reference to its being fair or necessary to increase the pay if
seven hours' work be asked from an Upper Division clerk. Do you think
there is any contract to do only 6 hours' work?" "No, there is no
contract whatever; theoretically the rule is that civil servants are
to do the business that is required of them. The practical difficulty
remains that if you do it you may have a great uproar. You may cause
discontent, and you may have, as I said before, pressure in the House
of Commons; but theoretically, and as a matter of right, I can see no
reason why every officer should not be obliged to give 7 hours for
the existing pay." "Have you not to some extent recognized it[364] by
creating a different scale of pay in the Lower Division for 7 hours
than for 6 hours?" "Yes, you have, and I am very sorry for it; when
I say you have, I was a party to it,[365] but I am sorry that we did
it." "But you are of course of opinion that when you announce that the
office hours are from 10 to 4, it means that these are the hours of
public attendance, but that it does not in any way prevent the head of
the office from asking the clerks to stop until the work is done?" "No;
but the larger your class of Lower Division clerks, the more you will
find that the hours become fixed hours, and if they are asked to attend
beyond them [because of unusual pressure of work], they will ask for
extra pay for attendance."[366]

* * * * *

[Sidenote: _Clerks are Clerks_]

In 1881, Mr. Fawcett, Postmaster General, created for the provincial
towns the class of "telegraph clerks," who are recruited from the
first class of telegraphists, and act as assistants to the assistant
superintendents. Since the men in question were styled clerks, they
immediately contended that their hours of work should be reduced from
8 hours a day to 39 hours a week, the hours of the clerks proper.
The Department always has refused to recognize that claim. But Mr.
Beaufort, Postmaster at Manchester, acting on a misreading of the
rules, from 1884 to 1890 granted the telegraph clerks at Manchester
the 39 hours a week. In 1892 the hours were raised to the correct
number, namely 8 hours a day, with half an hour for a meal. In 1896,
9 telegraph clerks from Manchester sent a spokesman to the Tweedmouth
Committee to state that they had become telegraph clerks in 1890, when
the hours were 35 a week, and that they deemed it a "hardship" to be
compelled to work 8 hours a day.[367]

In November, 1902, Mr. Austen Chamberlain, Financial Secretary to
the Treasury, stated in the House of Commons: "The town postmen at
Newton Abbot were formerly paid on too high a scale [in consequence
of an error of judgment made by a departmental officer]. The wages
were accordingly reduced some years ago, but the postmen then in the
service were allowed to retain their old scale of payment so long as
they should remain in the service, and the new scale was applied only
to postmen who entered the service subsequently. This will account for
there being temporarily two scales for postmen at Newton Abbott."[368]

[Sidenote: _Standard of Efficiency should not be Raised_]

In 1881, Mr. Fawcett, Postmaster General, established for Metropolitan
London the class of "senior telegraphists," with a salary rising by
annual increments of $40, from $800 to $950. He intended that this
class should be filled by the promotion of men from the first class
of telegraphists who possessed exceptional manipulative efficiency
as well as sufficient executive ability to act as assistants to the
assistant superintendents. But as a matter of fact many men were
promoted to this class by mere seniority and without reference to their
qualifications. In 1890, however, under Mr. Raikes, Postmaster General,
the Department resolved to promote to the senior class no more men who
were not fully qualified.[369] And in 1894, the Department imposed a
technical examination[370] between the first class of telegraphists
and the senior class, in order to insure that all men promoted to the
senior class should have the qualifications required of them. Mr. H.
C. Fischer, Controller of the London Central Telegraph Office, said
of this examination: "It is not considered unjust that this should
have been enforced in the case of men who had always been employed
on instrument duties, and who had only themselves to blame if they
neglected to acquire some knowledge of technical matters, which all
skilled telegraphists are expected to possess.... Even before the
institution of the examination it was always held that the possession
of technical knowledge gave the man an additional claim to promotion to
the senior class."[371]

Before the Tweedmouth Committee the representatives of the first class
telegraphists complained of the technical examination as a "grievance."
They said: "The regulation came into operation at once, an act which
is regarded as exceptionally unjust toward men of more than 20 years'
service, who, up to that time had understood from the general practice
of the Department, that, other things being equal, good conduct and
manipulative efficiency would secure promotion. Now, however, the
possession of technical knowledge is added as a necessary qualification
before promotion to the senior class, and this without a coincident
rise in the maximum [salary] of the first class as compensation for the
additional demand upon the capacity of the staff." As the alternative
to the raising of the maximum salary of the first class [$800], "it
was earnestly contended that the scale to which the officer is raised
on passing the examination should be materially enhanced [beyond the
present maximum of $950] in recompense for the further additional
demand upon his time, and for his pecuniary outlay in preparing himself
for the requirements of the Department."[372]

Prior to November, 1886, special intelligence was required of the
sorters of foreign letters in the London Central Post Office, who were
correspondingly well paid. The wages of the first class of sorters
of foreign letters began at $13.75 a week, and rose to $17.50, by
triennial increments of $1.25 a week. Those of the second class
began at $11.25, and rose to $13.75, by annual increments of $0.50 a
week. But in consequence of a material simplification of the duties
of the foreign letter sorters, consequent upon the changes in the
international postage charges, the Department resolved, in November,
1886, to replace the two classes of sorters of foreign letters by
one class, with wages ranging from $12.50 a week to $15.[373] It
was provided, however, that the existing sorters of the first class
should retain the old scale of wages; and that the existing sorters
of the second class should have the option of immediate promotion to
the new class, with wages rising from $12.50 to $15, or, "of being
advanced to the $13.75 to $17.50 scale, in the order in which they
would have attained to that scale if the old first class scale had
not been abolished." In other words, the men who, prior to November,
1886, had been in line for ultimate promotion to a class carrying wages
of $13.75 to $17.50, were offered the option "of being regarded as
having a vested interest to rise to $17.50 a week, as vacancies should
occur."[374]

[Sidenote: _Claim of Exemption from Vicissitudes of Life_]

In 1895, Mr. H. B. Irons, a second class sorter in London, appeared
before the Tweedmouth Committee to present the grievance of himself
and colleagues, who, prior to 1886, had given up the position of
first class letter carriers to become second class letter sorters in
order to improve their prospects of promotion. The grievance was that
the prospects of promotion of letter sorters had been curtailed by
the abolition of the sorterships of foreign letters in 1886, and the
abolition of the sortership of the first class of inland and foreign
newspapers in 1890. Mr. Irons alleged that he would have remained
a letter carrier had he foreseen the changes in question.[375] His
argument was that the civil servant must be exempt from the ordinary
chances and vicissitudes of life.

* * * * *

In 1890 some senior telegraphists protested that they ought to be made
assistant superintendents, alleging that they were performing the
duties of assistant superintendents. Mr. Raikes, Postmaster General,
found that some of the duties of the complainants were of the nature
alleged, but not all of them. Therefore, he made the complainants,
forty-nine in number, second class assistant superintendents. By 1896,
this new class had come to number sixty-five.

From 1881 to 1890, the proportion borne by the senior telegraphists to
the first class and second class telegraphists had ranged between 1 to
6.6 and 1 to 7.7. The promotion of forty-nine senior telegraphists in
1890, and of the others in subsequent years, raised the proportion in
question to 1 to 10, in 1895. But counting senior telegraphists and
second class assistant superintendents, there was, in 1895, one of
these superior officers to each 6.5 of first class and second class
telegraphists. In other words, the rate of promotion of first class
and second class telegraphists to appointments superior to the first
class of telegraphists, but inferior to the position of assistant
superintendent, had been more rapid in 1891 to 1895, than it had been
in 1881 to 1890.

In 1895, Mr. Nicholson, Chairman London Branch of the Postal Telegraph
Clerks' Association, appeared before the Tweedmouth Committee to voice
the grievance of the first class and second class telegraphists, which
was, that the rate of promotion from the second class and first class
had decreased, as shown by the fact that there was only one senior
telegraphist to each ten first class and second class telegraphists.
Mr. Nicholson contended that the increase of telegraphic messages
consequent upon the introduction of the charge of 12 cents for 12
words had necessitated the creation of a new class, the second
class superintendents; and that the first class and second class
telegraphists had a right to demand that they should derive benefit
from that increase of traffic and that necessity of creating a new
class of officers. That the Department's failure to fill the vacancies
created in the senior class of telegraphists by promotions to the
class of second class superintendents, had deprived the first class
and second class telegraphists of all advantage arising out of the
creation of a new class of officers, the second class assistant
superintendents.[376]

[Sidenote: _Right to Fixed Rate of Promotion_]

The nature of the claim made by the Chairman London Branch of the
Postal Telegraph Clerks' Association is forcibly illustrated by the
following incident from the proceedings of the Royal Commission
on Civil Establishments, 1888. Mr. H. A. Davies, the official
representative of the clerks in the Receiver and Accountant General's
Office of the General Post Office, had made a similar demand on behalf
of the men whom he represented. The Chairman asked him: "Does a man
enter the public service on the assumption that all the upper places
are to remain the same as when he enters.... If you and I enter the
public service finding a certain Department, the Post Office or any
other, with twenty posts above to which we had a reasonable hope, if we
behaved well, and showed merit; if administrative reform takes away
five of these posts, are we entitled to compensation, because that is
what it [your allegation of grievance] comes to? Can you say, there
being no contract whatever between me and the State when I entered
the office as a clerk, no contract whatever that I should attain to
a higher post, except when there is a vacancy, that I have a claim
[to compensation] when administrative reform takes away some of the
other places?" The spokesman of the Post Office clerks replied: "If
I were defending that [position] to Parliament, I think I should say
that the country has a certain duty toward men who, when they entered
the service, had, judging by the precedents of their office, a fair
prospect of reasonable promotion, and that if any economy is effected
by subsequent administrative reforms, the sufferers deserve some
consideration."[377]

* * * * *

From 1885 to 1888 Mr. Lawson, M. P.,[378] was a Member of the Royal
Commission appointed to inquire into the Civil Establishments. In
March, 1889, he intervened in the administration of the Post Office
by asking the Postmaster General how many vacancies there were in the
first class of telegraphists at the Central Telegraph Office, London;
how long those vacancies had been open, and whether the Postmaster
General had received a petition from the second class telegraphists for
their promotion; and whether there was anything to prevent him from
complying with the request. The Postmaster General replied that on
January 1, 1889, there had been 53 vacancies. "To thirty-four of those
vacancies I have made promotions within the last few days; and this,
practically, is an answer to the petition of December, 1888."[379] The
reader will recall that in February, 1888, Mr. Lawson had intervened on
behalf of a letter carrier who had been dismissed in 1882. In 1889 to
1892, and 1897 to 1904, Mr. Lawson was a Member of the London County
Council.

In June, 1902, Mr. Hay, M. P.,[380] asked the Postmaster General,
through the Financial Secretary to the Treasury: "With reference to
the fact that the proportion of appointments above $800 a year in the
Central Telegraph Office, London, now bears the same relation to the
staff below that salary as during the period when the circular [1881 to
1891] was issued promising a prospect of $950, whether he is aware that
during the years 1882 to 1892 the proportion was one appointment above
$800 to 5.5 below [that salary], and that the proportion at the present
time is one appointment above $800 to 6.4 below; and, seeing that this
difference of proportion represents nearly forty appointments, above
$800, whether he will take steps to readjust that proportion on the
basis of 1 to 5.5?"[381] In 1906, Mr. Hay was made a member of the
Select Committee on Post Office Servants.

In April and in August, 1902, Captain Norton asked the Postmaster
General, through the Financial Secretary to the Treasury, to appoint
so many additional senior telegraphists that it should no longer be
necessary to call on men in the class below to act as substitutes
for the senior telegraphists who were taking their annual leave of
one month.[382] In 1906, Captain Norton became a Junior Lord of the
Treasury in the Sir Campbell-Bannerman Ministry.

In February, 1902, Mr. Plummer[383] stated that at Newcastle-on-Tyne
thirty-eight telegraphists, who had, on an average, served 27 years
each, were waiting for promotion. "Will the Postmaster General
facilitate promotion by enforcing in the future the Civil Service
Regulation with reference to retirement[384] at the age of sixty
years?" Mr. Austen Chamberlain, Financial Secretary to the Treasury,
replied: "The Postmaster General would not feel justified in
enforcing the retirement of any efficient officers for the purpose
of accelerating the promotion of others." On August 1, 1902, Captain
Norton repeated the request.[385]

On November 24, 1902, Mr. O'Brien asked the Postmaster to create more
rapid promotion at Liverpool by retiring all men who had qualified for
the maximum pension [two-thirds of salary], irrespective of the fitness
of such men to continue to serve.[386]

On June 19, 1902, Mr. Keir Hardie asked the Secretary to the Treasury,
as representing the Postmaster General: "Whether he will state the
special qualifications which necessitate the retention in the Postal
service of the assistant superintendent, Mr. Napper, and the inspector,
Mr. Graham, at the West Central District Office, after reaching 60
years of age; and if the probable date of retirement can be given?"
On July 28, 1902, Mr. Keir Hardie asked: "If he will state what are
the special qualifications which necessitate the retention of the
inspector, Mr. E. Stamp, at the North Western District Office, after
attaining the age of 60 years; and if he can give the probable date of
this officer's retirement?"[387]

Any officer who is retired with a pension, on account of ill health,
before he is sixty years of age, may, if he recovers his health, be
recalled to duty at the discretion of the head of his Department or of
the Treasury. Under such circumstances the officer receives the salary
of his new office and so much of his pension as shall be sufficient
to make his total income equal to the original pension. Under the
foregoing rule two officers were made respectively postmaster at
Bristol and postmaster at Hastings.

Before the Tweedmouth Committee, Mr. Uren, President of the
Postmasters' Association, protested against such "blocking of some
of the best offices by pensioners.... Here are two good offices,
one with $4,000 a year, and the other with $2,750, which are taken
up by pensioners who recover their health, and so block a line of
promotion.... I only mention these as the two most recent cases with
which this sort of thing has happened, but they are not the only
occasions by a good many, which I am instructed to bring before your
Committee as a fair subject for consideration." Mr. Crosse, another
witness, added: "The Postal Clerks' Association also desire to
endorse the evidence put forward by the Postmasters' Association as
to the anomaly and injustice of certain postmasters being retained
in the service who are in the receipt of pension and salary from the
Department."[388]

[Sidenote: _Mechanical Equality Demanded_]

Prior to August, 1891, the postmen of metropolitan London were divided
into two classes: the second class, with wages rising from $4.50 a week
to $6, by annual increments of $0.25 a week; and the first class, with
wages rising from $6 a week, to $7.50, by annual increments of $0.25
a week. In consequence of the rapid growth of the postal business,
however, the postmen frequently passed through the second class into
the first class, not in six years, but in from two to five years. But
the rate of promotion from the second class into the first differed
materially in the several metropolitan branch offices, because of the
unequal growth of business at those several offices. That inequality of
promotion violated the ideal[389] of the civil servants, which is, that
all should fare alike; and therefore, the postmen demanded that the
division into two classes be abolished, and that every postman should
rise, by stated annual increments, from the initial wage of $4.50 to
the final wage of $7.50. But the abolition of classification would put
an end to the possibility of those rapid passings through the stages
between $4.50 and $6 that had been of frequent occurrence in the past
in some of the metropolitan branch offices. By way of compensation for
the loss of that chance the postmen demanded that the annual increment
be increased beyond $0.25 a week.

The Department, in August, 1891, abolished the classification of the
postmen, but it refused to raise the annual increment. It said that
the rapid promotion from $4.50 to $6 that had characterized the past
had been an accident, that it had not been foreseen, and that the men
who had entered the service while it had obtained had not acquired a
vested right to it. In 1896 the men who had been postmen prior to the
abolition of classification appeared before the Tweedmouth Committee
with the statement that they "were under the impression that it was an
official principle that no individual should suffer by the introduction
of a new scale of promotion or wages." They demanded compensation for
the fact that they had lost, in 1891, the possibility of passing in
less than the regular time from the wage of $4.50 to that of $6. They
stated that they were prepared to show that "they had suffered material
pecuniary loss ... amounting in some cases to about $500."[390] All
of which goes to show that in the British Post Office service the
abolition of a grievance can in turn become a grievance.

[Sidenote: _Equality, not Opportunity_]

Before the Tweedmouth Committee appeared also the representatives
of the telegraphers, to demand the abolition of the division of the
telegraphers into classes, with promotion by merit between the classes.
They demanded amalgamation into a single class, in which each one
should pass automatically from the minimum pay to the maximum, provided
he was not arrested by the efficiency bar, to be placed at $800 a
year. Mr. E. B. L. Hill, Assistant Secretary, General Post Office,
London, began his discussion of this demand by quoting with approval
the conclusion of the Telegraph Committee of 1893, which was: "We have
taken great pains to investigate this matter. Almost without exception
the provincial postmasters and telegraph superintendents were opposed
to an amalgamation of the classes, and gave the strongest testimony
to the value of the present division [into classes] as a means of
discouraging indifference, and encouraging zeal and efficiency. We
think ... that for purposes of discipline it is desirable to maintain
the division of the establishment into two classes." Mr. Hill continued
by saying that in the course of the last three or four years he had
changed his opinion, and had come to the conclusion that amalgamation
into one class must come. "The staff seems to desire, first of all,
equality, and the abolition of classification seems to insure the
fulfillment of that wish. At the same time classification is a valuable
incentive to exertion and efficiency...."[391]

[Sidenote: _Opportunities Rejected; Increased Pay Demanded_]

In 1896 the proportion borne by the supervising officers above the rank
of first class sorting clerks to the total staff of sorting clerks
was 18.85 per cent., whereas the proportion borne by the officers
above the rank of first class telegraphists to the total staff was
12.59 per cent. At the same time the proportion borne by the first
class clerks to the total of first and second class clerks was 20.17
per cent. on the postal side of the service, and 24.64 per cent. on
the telegraph side. In other words, the chances of promotion to a
supervising position are much better in the postal branch than in the
telegraph branch; so much so, that to an able and energetic man, the
postal branch is more attractive than the telegraph branch, even though
the chances of reaching a first class clerkship are somewhat better in
the telegraph branch than in the postal branch. But the letter sorting
clerk's work is more irksome than the work of the telegraphist, and
therefore "the telegraphists are usually reluctant, notwithstanding the
better prospects of promotion, to accept work on the postal side." For
example, in the four years ending with 1896, only ten telegraphists at
Birmingham had themselves transferred to the postal side, and three of
those ten had themselves re-transferred to the instrument room, because
the work on the postal side proved too hard for them. Again, on March
6, 1896, Mr. Harley, the postmaster at Manchester, issued the following
notice: "I should like to afford an opportunity to telegraphists in
this office of becoming acquainted with letter sorting duties, and,
with this view, if a sufficient number of officers apply, I will
arrange an evening duty of from 2 to 3 hours in the sorting office for
a month in every three, such duty to form a portion of their 8 hours'
duty. About 50 officers would be required to enable me to carry this
suggestion into effect, and I shall be glad if all officers who are
disposed to avail themselves of this opportunity of acquiring postal
knowledge will submit their names." At the end of three weeks Mr.
Harley had not had a single response, though he had in person explained
to a number of "representative telegraphists the advantage which a
knowledge of postal work would give them."

The telegraphists, as a body, decline to avail themselves of the
opportunities offered them to improve their chances of promotion; none
the less they allege they have a grievance in the fact that their
chances of promotion are not so good as are the chances of the sorting
clerks. They demand that the Post Office redress their grievance,
either by increasing the number of telegraph supervising officers, or
by raising the salaries of the first and second class telegraphists
sufficiently to compensate the telegraphists for their smaller chance
of becoming supervising officers.[392]

[Sidenote: _Parliamentary Intervention_]

The telegraphists even try to bring pressure on the Government to stop
the Post Office from forcing them to learn letter sorting. For example,
in 1896, the Post Office required the telegraphists and sorters
employed in the Oxford Central Post Office to work at the pleasure of
the Oxford postmaster at letter sorting or at telegraphing. The Oxford
telegraph clerks argued that they had contracts with the Government to
work as telegraph operators, and that the Government had no right to
force them either to do sorting, or to suffer transfer to some other
office where the convenience of the Government would not be affected
by their refusal to act as sorters. The clerks kept up their agitation
for years, and in December, 1902, they induced Mr. Samuel,[393] M. P.,
to champion their cause in the House of Commons.[394] Mr. Samuel, in
1895 and 1900, had contested unsuccessfully South Oxfordshire. He took
"First Class Honors" at Oxford, and he has published: _Liberalism,
Its Principles and Purposes_. In 1906, Mr. Samuel became Under Home
Secretary in the Campbell-Bannerman Ministry.

In June, 1904, Mr. William Jones asked the Postmaster General:
"Whether he is aware that for some time past endeavors have been made
to compel the telegraph staff at Oxford to perform postal duties, and
that they have been informed that they would be removed compulsorily
to other offices in the event of the men declining to perform those
duties; and whether, in view of the declaration of previous Postmasters
General, that telegraphists who had entered the service before 1896
are exempt from the performance of postal work, he will explain the
reasons for his action?" Lord Stanley, Postmaster General, replied:
"The telegraph work at Oxford has of late considerably fallen off
[in consequence of the competition from the telephone], and there is
consequently not sufficient work to keep the officers in the telegraph
office fully occupied. Their services have therefore been utilized
for the benefit of the Department in such manner as the exigencies
of the service require. All officers of the Department are expected
loyally to perform any work required of them which they are capable
of undertaking; and unless some means can be found of utilizing
the services of redundant telegraphists at the offices where they
are at present employed, a transfer to another office is the only
alternative."[395] Mr. Jones had sat in Parliament since 1895. He is a
private tutor at Oxford; has been assistant schoolmaster at Anglesey;
and has served under the London School Board.[396]

Within ten days of the Jones episode, Mr. Dobbie,[397] who had just
been sent to Parliament to represent Ayr Burghs, Scotland, intervened
on behalf of the Glasgow Post Office clerks, who objected to being
compelled to do dual duties.[398] At about the same time Mr. Henderson,
who, before entering Parliament, had been a Member of the Newcastle
Town Council, intervened on behalf of one Chandler, a sorting clerk
and telegraphist at Middlesbrough, who had been informed that his
increment would be withheld because of his ignorance of telegraphy. The
Postmaster General replied: "All the circumstances of his case have
already been examined more than once both by my predecessor and myself,
and I am quite satisfied that he has received proper treatment."[399]

In October, 1906, Mr. Parker, M. P., intervened on behalf of some
telegraph clerks at Halifax who were being made to sort letters.[400]

The Bradford Committee on Post Office Wages, 1904, reported: "... it
was pointed out that in the larger offices promotion is better on the
Postal side.... This is admitted, though we understand that it is open
to any telegraphists to acquire a knowledge of Postal business, and
so qualify for promotion on either side. It is found that this is not
done, however, as the men prefer the Telegraph work to the more irksome
Postal duties."

[Sidenote: _Sundry Vested Rights_]

The Post Office gives those counter men of London and Dublin who
receive or pay money over the counter, a risk allowance, for the
purpose of reimbursing them for any errors that they may make in
dealing with the public. No such allowance is given to the postal
clerks in any other city; nor are such allowances paid by railway
companies or other private employers. Upon the provincial Post Office
clerks making a demand for equal treatment with the London and Dublin
clerks, the Department decided to discontinue the allowances in London
and Dublin "as to future entrants to the postal service," and under
"the most sacred preservation of all existing interests."[401] The
Tweedmouth Committee endorsed this resolution, with the statement that
"the rights of existing holders of risk allowances should, of course,
in all cases be maintained."

The Tweedmouth Committee suggested a new scale of pay for the several
kinds of letter sorters in London. That new scale was suggested for two
reasons: for the purpose of discontinuing the complex system of special
allowances that had sprung up; and for the purpose of reducing the pay
of several classes of sorters, the existing scale of payment being too
high. The Committee proposed that all existing rights be safeguarded,
saying: "Present holders of allowances should enter the [new] scale
of salary at a point equal to their previous salary and allowances
combined, and wherever the maximum of the present scale together with
the allowances exceeds the maximum of the new scale, that, but no
further excess, should be granted."[402]

The Tweedmouth Committee also reported: "We think that the holidays of
the Dublin and Edinburgh [telegram] tracers should for the future be 14
week days, the same period as London men performing the same duties,
instead of 3 weeks as at present, the change as to holidays of course
not applying to present members of the class."[403]

The Tweedmouth Committee concluded that the holidays given to the
letter sorters and the telegraphists in London and in the provincial
towns were excessive. It proposed that the annual vacation of 21 week
days during the first 5 years of service and of one month after 5 years
of service, be reduced, to respectively 14 week days and 21 week days.
It added: "It is not, however, suggested that this change should apply
to those officers already in the service who receive a leave of 3 weeks
during the first 5 years, nor is it proposed to curtail the leave
granted to those officers who have already served 5 years, and are,
therefore, in enjoyment of a month's holiday."[404]

Before the Royal Commission on Civil Establishments, 1888, Sir
Reginald E. Welby, Secretary to the Treasury, testified that throughout
the Civil Service the Upper Division Clerks had 48 working days'
vacation a year, besides the usual holidays. He said that but for
custom, which had become "almost common law," there was no reason for
giving such a "very liberal" annual vacation. But he added that any
change should be made to apply only to future entrants to the public
service.[405]

In 1892 the Department increased from 21 week days, to one calendar
month, the annual leave of all men in the Central Post Office, London,
who were in receipt of $750 a year, or more. In the following year,
1893, the Department gave the same increase to men with $750 a year, or
more, in the branch offices of Metropolitan London, and in the offices
of the provincial towns. In 1895 the representatives of the men who had
not obtained the increase of annual leave until 1893, appeared before
the Tweedmouth Committee with the demand for ten days' pay by way of
compensation for the fact that, in 1892, they had "lost ten days."[406]

The tenacity with which the civil servants resist any change in
the conditions of service that is to their advantage, is further
illustrated by the following incidents.

Down to 1880, the overseers in the postal service, who are on their
feet all day, had one day a week of relief from duty. In 1880 that
allowance was reduced to half a day; and in 1893 it was discontinued
altogether. In each case the change was made to apply only to the
future entrants upon the office of overseer. In 1896 the new entrants
upon the office still were complying under protest only with the
requirement of the Department that they sign a paper stating that they
were not entitled to any weekly "relief leave of absence."[407]

There are four Monday Bank Holidays in the year; and for several
years prior to 1892, the Telegraph Branch, as an act of grace, gave
a Saturday holiday to those "news distributors" whose services could
be spared on the Saturdays preceding Monday Bank Holidays. In 1892 it
ceased to be possible to continue this act of grace without employing
men on over-time, and therefore the practice was discontinued. In
1896 the news distributors complained before the Tweedmouth Committee
that the withdrawal of "the days of grace was a grievance with which
they would like the Committee to grapple." The spokesman of the news
distributors said: "After having enjoyed the privilege for [several]
years it was withdrawn, an arbitrary course, almost, it is thought,
without precedent. To grant a privilege, and then take it away,
displayed a lamentable want of that courtesy that we think should be
inseparable qualities of power and position."[408]

[Sidenote: _Intervention by Members of Parliament_]

In June, 1904, Mr. Shackleton[409] intervened in the House of Commons
on behalf of some men in the Liverpool Post Office, whose grievance was
that an interval of 15 minutes, given as "an act of grace," had been
reduced to 10 minutes.[410]

In July, 1905, Mr. James O'Connor, M. P. for Wicklow, intervened in a
similar matter on behalf of the men at the London West Central District
Office.[411]

* * * * *

Before the Royal Commission on Civil Establishments, 1888, Sir Lyon
Playfair was asked whether it would not be better to replace by boy
clerks the "writers" employed in the past. Sir Lyon replied: "I think
that would be better for the civil service and better for the boy
clerks themselves. Of course, regard should be had to the writers
who are employed now, and the change should be made by not taking
on more, and not by dispensing with those that are now employed." A
moment before, Sir Lyon Playfair had been asked: "The writers are now
a very large and very important body in the public service, are they
not?" He had replied: "Yes, and they make you feel their largeness
and importance by Parliamentary pressure."[412] Sir Lyon Playfair had
been Chairman of the Royal Commission on the Civil Service which had
sat from 1875 to 1876; and he had been the author of the Playfair
Reorganization of the civil service in 1876.

Before the Committee on Civil Services Expenditure, 1873, Mr. W. E.
Baxter, Financial Secretary to the Treasury, said: ... "but I may say
at once in regard to the matter of the travelling expenses of county
court judges, that I think the whole thing has hitherto been in such
an unsatisfactory state that it would be very difficult to defend the
action of the Treasury in various matters connected with it." Thereupon
Mr. West, a Member of the Committee, queried: "Acting in accordance
with that view last year, the Chancellor of the Exchequer endeavored
to reform the system as to existing judges and as to future judges,
did he not?... Is that reform being now pursued with regard to the
existing judges?" The Financial Secretary to the Treasury replied:
"Not in regard to existing judges. I have always been of opinion that
it is very difficult to go back upon arrangements which have been made
in the past, however injurious to the public service and uneconomical
they may have been, and that it would be better for economists [persons
desiring to effect economy] to direct their attention to preventing
new arrangements of a similar character."[413]

* * * * *

[Sidenote: _Unbusinesslike Spirit Further Illustrated_]

The thoroughly unbusinesslike spirit of the postal employees is
illustrated still further in the following "grievance" laid before the
Tweedmouth Committee by the official representatives of the postal
employees, who spoke, not as individuals, but as the instructed
representatives of their respective classes of public servants.

Mr. G. McDonald presented the grievance of the "news distributors,"
who "are the picked men of the Telegraph Service, chosen on the ground
of exceptional merit." He complained that there was not sufficient
opportunity for promotion, since [the automatic] promotion was limited
to postmasterships worth from $1,000 to $1,250 a year, and there were
not enough postmasterships of that kind. Mr. McDonald admitted that
men under 35 years "by competitive examination," could rise out of the
class of News Distributors to surveyors' clerkships; but he argued that
since such promotion was attained by competitive examination, "it must
be credited to the man himself who wins his position, and I therefore
beg to suggest that it cannot count as promotion in the ordinary
sense."[414]

Another grievance of the News Distributors was that they were not
"treated and classed" as Major Division Clerks, though they were paid
on the scale of such clerks. They were compelled to work 48 hours a
week, whereas Major Division Clerks worked only 39 hours a week.[415]

Mr. Alfred Boulden presented the telegraphists' grievances as to
pensions. He demanded that retirement on pension should be optional at
the age of fifty; and that if a man died in harness, such deduction
as had been made from his salary toward the pension fund, should be
paid to his heir-at-law. Mr. H. C. Fischer, Controller London Central
Telegraph Office, replied that "optional retirement at 50 years of age
would result in the more healthy members of the staff retiring at that
age, and seeking other employment to add to their income, leaving the
less healthy and less useful persons to hang on in the service as long
as they could."[416]

Mr. A. W. North presented another grievance, namely, that a female
telegraph clerk can become a female superintendent in 21 years, whereas
a male telegraph clerk can reach the corresponding position only after
27 years of service.[417]

[Sidenote: _The Malingerers' Grievance_]

Mr. J R. Lickfold appeared as the representative of the postal
employees to demand that in the case of an employee having failed to
appear for duty, the Department should accept without any inquiry
whatever the medical certificate of any physician. At this time it was
the practice of the Department to doubt the genuineness of the illness
and the _bona fides_ of a medical certificate only in case "the man had
a bad record for frequent short sick absences," "though it was a well
known fact that private [physicians' as distinguished from departmental
physicians'] certificates could be obtained for 12 cents without even
the doctor seeing the patient, but on a mere statement of his symptoms
from somebody else." In support of this request, Mr. Lickfold, as the
instructed representative of the postal employees, could make no better
argument than to cite the dismissal, early in 1894, of two railway
Post Office sorters, W---- and J----. In the evidence in rebuttal, Mr.
J. C. Badcock, Controller London Postal Service, gave the following
account of the episode in question. W---- and J---- were absent from
duty from January 8 to 11 inclusive. On January 10 they sent in medical
certificates dated the 8th, but the date of one of the certificates had
apparently been changed from the 9th. W----'s landlady testified that
W---- and J---- had returned to W----'s lodgings on the 8th, shortly
after the departure of the mail train, saying that they had missed
the mail, but saying nothing of illness. She added that both men had
been repeatedly at W----'s lodgings on the 8th and 9th. Both W----
and J---- were absent from their lodgings during the greater part of
the three days from the 8th to the 10th. The Post Office inspector
found J---- in bed on the night of the 10th. J---- told him he had
not seen W---- since the 6th, gave evasive answers, and contradicted
himself. The inspector also found W---- on the night of the 10th, and
gave an equally unfavorable report upon W----'s answers. On the 11th,
the Departmental Medical Officer found both men in W----'s room, and
reported there was no reason why both men should not have been on duty
from the 8th to the 10th.

Mr. Spencer Walpole, Permanent Secretary of the Post Office and a
Member of the Committee, said to the witness: "Have you any doubt that
the Department would not have taken the extreme course of dismissing
any of its servants on the divided opinion of two medical men, if there
had been no previous cases against them?... These men are described as
deliberate malingerers?" The Chairman of the Committee added: "Do you
not think it would be wise that before bringing forward a particular
case of this sort, you should inform yourself thoroughly as to the
nature of the case, and as to the character of the men to whom you
refer?"[418]

* * * * *

Avery large portion of the evidence presented before the Tweedmouth
Committee, which evidence covered upward of a thousand closely printed
folio pages, affords a melancholy comment upon the theory which is
rapidly spreading from the German Universities over the English
speaking countries, to wit, that the extension of the functions of the
State to the inclusion of business enterprises automatically creates
a public spirit which strengthens the hands of the political leaders
in charge of the State, even to the point of enabling those leaders
to reject the improper demands made upon them by organized bodies of
voters, and to administer the State's business ventures with an eye
single to the welfare of the community as a whole, particularly the
long-run interest of the taxpayers. The so-called Norfolk-Hanbury
compromise, the appointment and Report of the Bradford Committee,
and the appointment, in 1906, of the Select Committee on Post Office
Servants--the last act not having the support, by speech or by vote,
of a single man of first rate importance in the House of Commons--are
melancholy instances of what that most discerning of statesmen, the
late Marquis of Salisbury, used to call "the visible helplessness of
Governments."

FOOTNOTES:

[363] _Third Report from the Select Committee on Civil Services
Expenditure_, 1873; q. 4,641 and 4,418.

[364] That is, the claim to additional pay for seven hours' work.

[365] That is, the Civil Service Inquiry Commission, 1875-76, of which
Sir T. H. Farrer was a member.

[366] _Second Report of the Royal Commission appointed to inquire into
the Civil Establishments_, 1888; q. 10,545 and following, and 20,043
and following.

[367] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 13,279, 13,301 and following.

[368] _Hansard's Parliamentary Debates_, November 21, 1902, p. 147.

[369] _Hansard's Parliamentary Debates_, July 16, 1897, p. 352. Mr. R.
W. Hanbury, Financial Secretary to the Treasury and representing the
Postmaster General: "But there were in the senior class certain men
who, owing to the fact that they had been promoted by seniority without
passing any examination, were not quite up to the normal average of the
senior class."

The reader will note that in 1890 no effort was made to remove the men
not up to the standard of the senior class. The Government had to await
the retirement or the death of the incompetent men.

[370] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. H. C. Fischer, Controller London Central
Telegraph Office; q. 2,305.

The examination covers: (1) "Crossing and looping wires with facility
and certainty. (2) Tracing and localizing faults in instruments.
(3) Tracing and localizing permanent and intermittent earth contact
and disconnection faults on wires. (4) Methods of testing the
electro-motive force and resistance of batteries, and a general
knowledge of the essential features of the various descriptions of
batteries. (5) System of morning testing, both as regards sending and
receiving currents, with the necessary calculations in connection
with the same. (6) Making up special circuits in cases of emergency.
(7) Joining up and adjusting single-needle, single-current, and
double-current Morse, both simplex and duplex, and Wheatstone
apparatus. (8) Fitting a Wheatstone transmitter to an ordinary
key-worked circuit. (9) A general knowledge of the principles of
quadruplex and multiplex working. (10) Measuring resistance by
Wheatstone bridge."

These subjects are the same as those prescribed for superintendents and
assistant superintendents, but the examination is less severe.

[371] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Appendix, p. 1,083.

[372] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Appendix, p. 1,078; and q. 2,320, Mr. Nicholson,
Chairman London Branch, Postal Telegraph Clerks Association. See also:
q. 3,919, 4,135, 13,333, 13,344, 13,415, 15,142, and Appendix, p. 1,083.

[373] The wages of the sorters of inland letters at the time were: $10
to $14 for the first class, and $4.50 to $10 for the second class.

[374] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. J. C. Badcock, Controller London Postal
Service; q. 2,190 _et passim_, and Appendix, pp. 1,063 and 1,074.

[375] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 719 and following.

[376] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 2,292 to 2,366, and 3,945 and following.

[377] _Second Report of the Royal Commission on Civil Establishments_,
1888; q. 20,291 to 20,346.

[378] _Who's Who_, 1905, Lawson, Hon. H. L. W.; Lieutenant-Colonel and
Honorable-Colonel commanding Royal Bucks Hussars; e. s. of 1st Baron
Burnham. Education: Eton; Balliol College, Oxford. M. P. (L.) West St.
Pancras, 1885-92; East Gloucestershire, 1883-95; L. C. C. West St.
Pancras, 1889-92, and Whitechapel, 1897-1904.

[379] _Hansard's Parliamentary Debates_, March 28, 1889, p. 1,022.

[380] _Who's Who_, 1905, Hay, Honorable C. G. D., M. P. (C.) since
1900; partner in Ramsford & Co., Stock-brokers; founder, manager, and
director of the Fine Art and General Insurance Co., Ltd.

[381] _Hansard's Parliamentary Debates_, June 2, 1902, p. 1,096.

[382] _Hansard's Parliamentary Debates_, April 15, 1902, p. 283; and
August 1, 1902, p. 396.

[383] _Who's Who_, 1905, Plummer, Sir W. R., Kt. cr. 1904; M. P.
(C.) Newcastle-on-Tyne since 1900; merchant; member of City Council;
Director of Newcastle and Gateshead Gas Co.

[384] _Hansard's Parliamentary Debates_, March 25, 1903; Mr. Austen
Chamberlain, Postmaster General: "The regulation is that all
pensionable officers of whatever grade whose conduct, capacity, and
efficiency fall below a fair standard shall be called upon to retire at
sixty; but retirement at sixty is not enforced in the case of officers
whose conduct is good, and who are certified by their superior officers
to be thoroughly efficient."

[385] _Hansard's Parliamentary Debates_, February 4, 1902, and August
1, 1902, p. 396.

[386] _Hansard's Parliamentary Debates_, November 24, 1902, p. 231.

[387] _Hansard's Parliamentary Debates_, June 19, 1902, p. 1,101; and
July 28, 1902, p. 1,346.

[388] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 12,537 to 12,551; and Appendix, p. 1,108. See
also: _Second Report of the Royal Commission on Civil Establishments_,
1888, p. xxiii; and _Third Report from the Select Committee on Civil
Services Expenditure_, 1873; Mr. R. E. Welby, Principal Clerk for
Financial Business in the Treasury; q. 507 to 515.

[389] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. E. B. L. Hill, Assistant Secretary General
Post Office, London; q. 15,134.

[390] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. H. Symes, representative of the London
Postmen; q. 10,115 to 10,197; and Mr. J. C. Badcock, Controller London
Postal Service; q. 11,492.

[391] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 15,134 _et passim_.

[392] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. Lewin Hill, Assistant Secretary General
Post Office, London; q. 15,135 to 15,142; Mr. T. D. Venables, General
Secretary Postal Telegraph Clerks' Association; q. 4,620 _et passim_;
and Mr. Jno. Christie, first class telegraphist at Edinburgh; q. 5,117
_et passim_.

[393] _Who's Who_, 1904, Samuel, Herbert, (L.) M. P., Cleveland
Division of N. Riding, Yorkshire, since 1902. Contested unsuccessfully,
South Oxfordshire, 1895 and 1900. Education: University College School;
Balliol College, Oxford. First Class Honors, Oxford, 1893.

[394] _Hansard's Parliamentary Debates_, December 10, 1902, p. 658.

[395] _Hansard's Parliamentary Debates_, June 6, 1904, p. 780.

[396] _Who's Who_, 1905.

[397] At the by-election of January 29, 1904, Mr. Dobbie was elected
by a majority of 44; at the General Election of January, 1906, he was
defeated by 261 votes. The number of electors in the Ayr District is
8,031.

[398] _Hansard's Parliamentary Debates_, June 14, 1904.

[399] _Hansard's Parliamentary Debates_, June 13, 1904.

[400] _Hansard's Parliamentary Debates_, October 29, 1906, p. 669.

[401] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; Mr. E. B. L. Hill, Assistant Secretary General
Post Office, London; q. 15,180; and Mr. S. Walpole, Secretary to the
Post Office; q. 15,274.

[402] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, p. 11.

[403] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, p. 18.

[404] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897, p. 8.

[405] _Second Report of the Royal Commission on Civil Establishments_;
q. 10,590 to 10,595.

[406] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 4,215 and following, and 3,198.

[407] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 3,631 to 3,636, 3,583, and 4,397 and
following.

[408] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 3,037 to 3,060.

[409] _Who's Who_, 1905, Shackleton, D. J., M. P. (Lab.), since 1902.
Secretary of Darwen Weavers' Association; Vice-President of the
Northern Counties Weavers' Amalgamation; Member of Blackburn Chamber of
Commerce.

[410] _Hansard's Parliamentary Debates_, June 6, 1904, p. 779.

[411] _Hansard's Parliamentary Debates_, July 24, 1905, p. 34.

[412] _Second Report of the Royal Commission on Civil Establishments_,
1888; q. 20,114 and 20,115.

[413] _Third Report from the Committee on Civil Services Expenditure_,
1873; q. 4,729 to 4,731.

[414] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 3,035 and 3,065.

[415] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 2,985 and following, and 3,035 to 3,036.

[416] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 2,777 and following, and Appendix, pp. 1,079
and 1,084.

[417] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 2,576.

[418] _Report of the Inter-Departmental Committee on Post Office
Establishments_, 1897; q. 671, 660 to 663, and 1897 to 1914.

CHAPTER XVIII

THE HOUSE OF COMMONS STANDS FOR EXTRAVAGANCE

Before proceeding to the subject proper of this chapter, it is
desirable to say a word about the organization and the work of the
Treasury.[419]

The Treasury consists of the First Lord of the Treasury, who is almost
invariably the Prime Minister; the Chancellor of the Exchequer; and
three Junior Lords of the Treasury. "The Treasury is pre-eminently
a superintending and controlling office, and has properly no
administrative functions." Its duty is to reduce to, and maintain at,
the minimum compatible with efficiency, the expenditures of the several
Departments of State.

The Treasury has three Secretaries: the Financial Secretary, the
Parliamentary, or Patronage Secretary, and the Permanent Secretary.
The Financial Secretary, after the Chancellor of the Exchequer, is the
political head and conductor of the Treasury. He is one of the hardest
worked officers of the Government. His duties were well described,
recently, by Mr. Austen Chamberlain, in the course of a brief sketch
of his official career. Said Mr. Chamberlain: "From the Admiralty he
was transferred to the position of Financial Secretary to the Treasury,
where, as his chief explained to him, he was in the position of an old
poacher promoted to be gamekeeper, and his first duty was to unlearn
the habits of five years and save money where previously it had been
his pleasure to spend it." The Parliamentary, or Patronage Secretary
is the principal Government Whip. "He is a very useful and important
functionary. His services are indispensable to the Leader of the House
of Commons in the control of the House and the management of public
business." "It devolves upon him, under the direction of the Leader
of the House, 'to facilitate, by mutual understanding, the conduct
of public business,' and 'the management of the House of Commons, a
position which requires consummate knowledge of human nature, the most
amiable flexibility, and complete self-control.'" As "Whipper-in," the
Parliamentary Secretary is generally assisted by two of the Junior
Lords of the Treasury, who are, at the same time, Government Whips.
"Those useful functionaries are expected to gather the greatest number
of their own party into every division [of the House of Commons], and
by persuasion, promises, explanation, and every available expedient, to
bring their men from all quarters to the aid of the Government upon any
emergency. It is also their business to conciliate the discontented and
doubtful among the ministerial supporters, and to keep every one, as
far as possible, in good humor." "An estimate of the importance of the
duties which would naturally devolve upon these functionaries--from the
increasing interference of the House of Commons in matters of detail,
and the necessity for the continual supervision of some Member of the
Government conversant with every description of parliamentary business,
in order to make sure that the business is done in conformity to the
views entertained by the House--induced Sir Charles Wood,[420] to
declare, in 1850, that the reduction of the number of Junior Lords from
four to three was a very doubtful advantage."

The Financial Secretary and the Parliamentary Secretary are political
officers, that is, they sit in the House of Commons, and they change
with every change in the Government. The Permanent Secretary, on the
other hand, is a non-political officer, or civil servant, who retains
office through the successive changes of Government, and secures the
continuity of the office. He is the official head of the Department,
and of the whole civil service.

The foregoing facts make it clear that for the purposes of this present
discussion, one can cite no more authoritative personages than the
several Secretaries of the Treasury.

* * * * *

The Select Committee on National Expenditure, 1902, took a great deal
of evidence on the effect of the intervention of the House of Commons
in the administrative details of the several Departments of State,
particularly on the impairment of the power of the Treasury to control
the expenditure of the several Departments.

[Sidenote: _Lord Welby on Change in Public Opinion_]

The most important witness was Lord Welby, who, as Mr. Welby, had
entered the Treasury in 1856; had been Head of the Finance Department
from 1871 to 1885; and had been Permanent Secretary from 1885 to 1894.
Lord Welby said that in theory the Treasury had full power of control
over the expenditures of the several Departments, but that in practice
that power of control was limited by the state of public opinion as
reflected in the House of Commons. As soon as the Treasury became aware
that it had not public opinion at its back, that fact "would have a
certain influence on many of its decisions." Then again, as soon as
the other Departments of State became aware that the Treasury was not
supported by public opinion, the authority of the Treasury over those
Departments was impaired. "If an idea gets abroad that the House of
Commons does not care about economy, you will not find your servants
economical." Lord Welby then went on to say that in all the political
parties in the House of Commons, "the old spirit of economy had been
very much weakened." He put the change of public opinion at about
the middle of the seventies, or, perhaps, rather later, say, in the
eighties. Previous to that change the influence of the Chancellor of
the Exchequer had been "paramount, or very powerful, in the Cabinet."
But with the change in public opinion, "the effective power of
control in the Chancellor of the Exchequer had been proportionately
diminished." Lord Welby concluded: "I constantly hear it said now by
people of great weight that economy is impossible, that you cannot get
the House of Commons to pay attention [to counsels of economy].... The
main object [to be striven after], I think, is that there should be
some correlation both in the minds of the Government of the day and in
the minds of the House of Commons between resources and expenditure;
I think that ought to exist, but I do not think it does exist at
present. I see no evidence of it."[421]

Mr. Hayes Fisher,[422] a Member of the Committee, and Financial
Secretary to the Treasury, in 1902 to 1903, replied to Lord Welby:
"But is not the business of the Treasury, and the main business of
the Treasury, to check that expenditure and keep it within reasonable
bounds, outside of questions of policy?" Lord Welby replied: "Quite
so; but might I venture to ask the honorable Member, who occupies one
of the most important posts in the Government, whether he would not be
glad of support in the House of Commons?" "Most certainly we should on
many occasions," was the answer.

[Sidenote: _Sir George H. Murray on Change in Public Opinion_]

Sir George H. Murray,[423] Permanent Secretary to the Post Office,
was called as a witness because "in the official posts he had held,
particularly as Private Secretary to the late Prime Minister, Mr.
Gladstone, he had had frequent opportunities for observation not only
of the reasons for expenditure, but of the control exercised over it in
Parliament." He said: ...

"But I think the whole attitude of the House itself toward the public
service and toward expenditure generally, has undergone a very material
change in the present generation.... Of course, the House to this day,
in the abstract and in theory, is very strongly in favor of economy,
but I am bound to say that in practice Members, both in their corporate
capacity and, still more, in their individual capacity, are more
disposed to use their influence with the Executive Government in order
to increase expenditure than to reduce it.... That is the policy of the
House--to spend more money than it did, to criticize expenditure less
closely than it did, and to urge the Executive Government to increase
expenditure instead of the reverse."[424]

[Sidenote: _The Commons the Champion of Class Interests_]

Sir Ralph H. Knox,[425] who had been in the War Office from 1856 to
1901, and who, for forty years, had listened to the discussions in
Parliament of the Estimates of Expenditure, said: ... "The mass of
speeches that are made in Supply before the House of Commons, are
speeches made on behalf of those who have grievances, their friends
or constituents, or those with whom they work, or in whom they are
particularly interested. If you take speech after speech, you find
they are simply to the effect: 'we want more'--and they get more....
In former days there were more Members who were willing to get up with
some pertinence and some knowledge to criticize those proposals. But
I cannot say there has been any very great tendency in that direction
when details are being discussed.... What I want, is [someone] to nip
in the bud, new proposals which are made by Members of Parliament
very often on behalf of their constituents. A Member, for instance,
represents what I should call a labor borough; he gets up and proposes
that the pay of every man employed in certain [Government] factories
or dockyards should be increased by so much a week, what I want is
somebody to get up and say: 'That is not the view of the country,
you must not accept that;' but instead of that the matter goes _sub
silentio_, and the Government, which is naturally interested in economy
and in keeping the expenditure down, is induced to think if there is
any feeling in the House at all, it is in favor of doubling everybody's
pay." Sir R. H. Knox said he desired more opposition to unwarranted
proposals, "because I know what extreme weight is attached to the
speeches in Supply by the Minister in charge of a Department, and by
the Department itself; but if they find that there is not a single man
interested in economy when the details of the Estimates are discussed,
it places them in an exceedingly difficult position."[426]

[Sidenote: _Commons Debates weaken Treasury's Hands_]

Sir Edward Hamilton, Assistant Secretary to the Treasury since 1894,
said that the Treasury could depend less than formerly upon the support
of the House of Commons, and that often-times the tendency of the
debates in the House was to weaken the hands of the Treasury.[427] Sir
Edward Hamilton had entered the Treasury in 1870; had served as Private
Secretary to Mr. Lowe, Chancellor of the Exchequer, in 1872-73; and as
Private Secretary to Mr. Gladstone, First Lord of the Treasury, in 1880
to 1885. He had been made successively Principal Clerk of the Finance
Division in 1885; Assistant Financial Secretary in 1892; and Assistant
Secretary in 1894. In 1902 he was made Permanent Financial Secretary.

Mr. Austen Chamberlain, a member of the Select Committee, asked Mr.
R. Chalmers,[428] a Principal Clerk at the Treasury: "Is it within
your experience as an official of the Treasury that Ministers of other
Departments not infrequently represent, as the reason for allowing
expenditure, the strong pressure that has been put upon them in the
House of Commons?" "Yes; I have seen repeated instances of that." "And
their inability to resist that pressure for another year?" "Yes."[429]

Sir John Eldon Gorst, M. P., a man of large experience of the Public
Service, said he had no doubt that in all offices there were officers
who had ceased to have anything to do; and that was particularly
true of the Education Department, where there was much reading of
newspapers, and much literary composition. He had "even heard of rooms
where Ping Pong was played, there being nothing else to do at the
moment." Sir John Eldon Gorst continued: "The Treasury has power to
make an inquiry into every Office, it could institute an inquiry to
see whether the office was or was not economically managed, but so
far as I know that power never has been exercised. It would be very
difficult indeed for the Parliamentary Head of a Department to call in
the Treasury for such an investigation. It would make the Parliamentary
head extremely unpopular. The only person who, in my opinion, as things
are, can really influence the expenses of an office, is the Civil
Service head.... But although the Civil Service head of the office
has a very great motive to make his office efficient, because his own
credit and his own future depend on the efficiency of his office, he
has comparatively little motive for economy. Parliament certainly does
not thank him; I do not know whether the Treasury thanks him very
much; certainly his colleagues do not thank him; ... and the natural
disposition of a man to let well enough alone renders him reluctant
to take upon himself the extremely ungrateful task of making his
office, not only an efficient one, but also an economical one. I think
anybody who has any experience of mercantile offices, such as a great
insurance office, or anything of that kind, would be struck directly
with the different atmosphere which prevails in a mercantile office
and a Government office.... I have no hesitation in saying that any
large insurance company, or any large commercial office of any kind, is
worked far more efficiently and far more economically than the best of
the Departments of His Majesty's Government."[430]

Sir John Eldon Gorst's statement that he knew of no instance of the
Treasury exercising its power of instituting an inquiry conducted by
Treasury officers, into the administration of a Department of State,
recalls to mind some testimony given by Sir R. E. Welby, Permanent
Secretary to the Treasury, before the Royal Commission on Civil
Establishments, 1888. Mr. Cleghorn, a Member of that Commission, asked
Sir R. E. Welby: "Is there anybody at the Treasury, for instance, who
could say to the Board of Trade, or any other particular Department:
'You have too many clerks, you must reduce them by ten?' Is there
anybody at the Treasury with sufficient power and knowledge of the
work to be in a position to say that, and to take the responsibility
of it?" Sir R. E. Welby replied: "No." Thereupon Mr. R. W. Hanbury,
another Member of the Commission, asked: "There is not?" Once more the
answer was: "No."[431]

Again, in 1876, before the Select Committee on Post Office Telegraph
Departments, Mr. Julian Goldsmid, a Member of the Committee, asked Mr.
S. A. Blackwood, Financial Secretary to the Post Office: "You would not
like, perhaps, to give the reasons for that enormous overmanning which
existed in some of the [telegraph] offices [in 1873 to 1875]?" Mr.
Blackwood replied: "I am not acquainted with the reasons myself."[432]

Sir Ralph H. Knox, in the course of his testimony, had quoted Mr.
Bagehot's statement: "If you want to raise a certain cheer in the
House of Commons, make a general panegyric on economy; if you want to
invite a sure defeat, propose a particular saving." He had continued:
"I should like to add, 'If you want to lose popularity, oppose the
proposals for increase.' There ought to be some Members in the House of
Commons who would undertake that line."

[Sidenote: _Gladstone's Tribute to Hume_]

This wish of Sir Ralph H. Knox recalls to mind the tribute paid,
in 1873, by Mr. Gladstone, to the memory of Joseph Hume, the first
as well as the last Member of the House of Commons to acquire a
knowledge of the expenditures of the Government which was sufficient
to enable the possessor to criticize with intelligence the details
of the expenditures of the Government. Said Mr. Gladstone: ... "and
in like manner, I believe that Mr. Hume has earned for himself an
honorable and a prominent place in the history of this country--not by
endeavoring to pledge Parliament to abstract resolutions or general
declarations on the subject of economy, but by an indefatigable and
unwearied devotion, by the labor of a life, to obtain complete mastery
of all the details of public expenditure, and by tracking, and I would
almost say hunting, the Minister in every Department through all these
details with a knowledge equal or superior to his own. In this manner,
I do not scruple to say, Mr. Hume did more, not merely to reduce the
public expenditure as a matter of figures, but to introduce principles
of economy into the management of the administration of public money,
than all the men who have lived in our time put together. This is the
kind of labor, which, above all things, we want. I do not know whether
my honorable and learned friend [Mr. Vernon Harcourt], considering his
distinguished career in his profession, is free to devote himself to
the public service in the same way as Mr. Hume did. If, however, he is
free to do so, I would say to him: 'By all means apply yourself to this
vocation. You will find it extremely disagreeable. You will find that
during your lifetime very little distinction is to be gained in it, but
in the impartiality of history and of posterity you will be judged very
severely in the scales of absolute justice as regards the merits of
public men, and you will then obtain your reward.'"[433]

The British public, needless to say, still is waiting for the man,
or men, who shall take upon themselves the invidious but honorable
task of stemming the tide to extravagant expenditure, which, in Great
Britain, as elsewhere, is the besetting sin of popular government. The
British people still are waiting, though, since 1870, they have vastly
increased the functions of the Government by nationalizing a great
branch of industry, and therefore are more than ever in need of persons
who shall emulate the late Joseph Hume.

* * * * *

In conclusion, let us compare with the testimony given in 1902, the
testimony given in 1873, before the Select Committee on Civil Services
Expenditure.

A Member of the Select Committee of 1873 asked Mr. W. E. Baxter,
Financial Secretary to the Treasury: "Am I right in thinking that
you do not agree with the Chancellor of the Exchequer's declaration
with regard to the Treasury? I asked him this question: 'Then it is a
popular delusion to believe that the Treasury does exercise a direct
control over the expenditure of the Department?' And the Chancellor
replied: 'I do not know that it is popular, but it is a delusion; I
think that it would be much more popular that the Treasury should
exercise no control at all.'" Mr. Baxter replied: "I think that the
Chancellor stated it too broadly, and would, probably, if he had been
Secretary to the Treasury for two or three years, have found that the
Treasury did, in point of fact, go back to some extent over the old
expenditure as well as try to stop increases." A moment before, Mr.
Baxter had said: "The most unpleasant part, as I find it, of the duty
of the Financial Secretary to the Treasury is to resist the constant
pressure brought day by day, and almost hour by hour, by Members of
Parliament, in order to increase expenditure by increasing the pay
of individuals, increasing the pay of classes, and granting large
compensations to individuals or to classes." The Chairman of the
Committee queried: "And that pressure, which is little known to the
public, has given you, and your predecessors in office, I presume, a
great deal of thought and a great deal of concern?" Mr. Baxter replied:
"As I said before, it is the most unpleasant part of my duties, and
it occupies a very great deal of time which probably might be better
spent." At this point Mr. Sclater-Booth asked: "You spoke of the
constant Parliamentary pressure which has been exercised with a view to
increasing salaries or compensations, do you allude to proceedings in
Parliament as well as private communications, or only to the latter?"
Mr. Baxter replied: "I did in my answer only allude to private
communications by letter and conversation in the House, because that
was in my mind at the time. But of course my answer might be extended
to those motions in the House which are resisted without effect by
the Government, and which entail great expenditure upon the country."
Mr. Herman queried: "When you speak of the pressure put upon you by
Members of Parliament for the increase of pay to classes, and the other
points that you named, I suppose that you mean that it is partly party
pressure, and that you are more subject to it at the present time than
you would be if a Conservative Government were in power?" Mr. Baxter
replied: "In my experience it has very little to do with party; men
from all quarters of the House are at me from week to week." "Do you
mean to say that men opposed to you in political principles apply to
you for that sort of thing now?" "Certainly I should wish it to be
distinctly understood that they do not ask this as a favor; they do
not ask favors of me. They simply wish me to look into the question of
the pay of individuals and of classes of individuals, as they put it,
with a view of benefitting the public service.... In very few instances
since I have been Financial Secretary to the Treasury have I been
asked by anyone to advance a friend, or to do anything in the shape of
a favor. The representations are of this sort: 'Here are a class of
public officers who are underpaid. We wish you to look into the matter,
and to consider whether or not it would be advantageous to the public
service that their salary should be increased.' I look into it, and I
say that I am not at all of that opinion, upon which my friend tells me
that he will bring the matter before the House, and show us up." "And
the other evil is one which is rapidly diminishing, and, in fact, is
very small now, namely, interference in favor of individuals?" "Very
small indeed."

To a question from Mr. Rathbone, Mr. Baxter replied: "I do not think
that the representations in question have much effect; I only stated
that the most unpleasant part of my duties was resisting the pressure
brought to bear in that way." Thereupon Mr. Rathbone continued: "They
may not have an effect when the Government has a majority of one
hundred or so, or when there is no election impending, but do you
think they have no effect when, as we have seen in former years for
long periods, the Government is carried on, whether by one side or the
other, by a very small majority, or when an election is impending?"
Mr. Baxter replied: "I have no doubt that they have had the effect
in former times in those circumstances." "Do you think they would be
liable to have that effect again if either party should be reduced
to that condition?" "It may be so." "Can you suggest any mode of
abating the Parliamentary pressure to which you have alluded, whether
it be exercised by public motions or by private influence?" The
Financial Secretary to the Treasury replied: "No; it is an evil very
difficult to remedy. I think the better plan would be to inform the
constituencies on the subject and let them know the practice which
so widely prevails, in order that, if inclined to take the side of
economy, they may look after their Members of Parliament." A moment
later, Mr. Sclater-Booth asked: "Do you not think from what you have
seen of the public service, that the Treasury, existing particularly
for that purpose, is the body which must be permanently relied upon
to keep down expenditure?" "Decidedly so." "Even the constituencies
can scarcely, as a rule, be appealed to in that sense, can they?" "No;
I attach very much more importance to the power of the Treasury than
either to the action of the House of Commons, or, I am sorry to say, to
the voice of the constituencies."[434]

FOOTNOTES:

[419] The subjoined statements, excepting the quotation from Mr. Austen
Chamberlain, are taken from A. Todd: _On Parliamentary Government in
England_.

[420] Sir Charles Wood, first Viscount of Halifax. Private Secretary
to Earl Grey, 1830 to 1832; Financial Secretary to the Treasury, 1832
to 1834; Secretary to the Admiralty, 1835 to 1839; Chancellor of the
Exchequer, 1846 to 1852; President of the Board of Control, 1852 to
1855; First Lord of the Admiralty, 1855 to 1858; Secretary of State for
India, 1859 to 1866; raised to Peerage as Viscount Halifax in 1866;
Lord Privy Seal, 1870 to 1874.

[421] _Report from the Select Committee on National Expenditure_, 1902;
q. 2,516 to 2,605.

[422] _Who's Who_, 1905, Fisher, Wm. Hayes, M. P., Financial Secretary
to the Treasury, 1902-1903; Junior Lord of the Treasury, and a
Ministerial Whip, 1895 to 1902; Hon. Private Secretary to Sir Michael
Hicks-Beach, 1886 to 1887; and to Right Honorable A. J. Balfour, 1887
to 1892.

[423] _Who's Who_, 1904, Murray, Sir G. H., Joint Permanent Under
Secretary to the Treasury since 1903. Entered the Foreign Office, 1873;
transferred to Treasury, 1880; Private Secretary to Right Honorable W.
E. Gladstone and to Earl of Rosebery, when Prime Minister; Chairman
Board of Inland Revenue, 1897 to 1899; Secretary to the Post Office,
1899 to 1903.

[424] _Report from the Select Committee on National Expenditure_, 1902;
q. 1,631 to 1,673, and 1,730 to 1,732.

[425] _Who's Who_, 1904, Knox, Sir Ralph H., entered War Office
in 1856; Accountant-General, War Office, 1882 to 1897; Permanent
Under Secretary of State for War, 1897 to 1901; a Member of the
Committee which worked out Lord Cardwell's Army Reform, and of the
Royal Commission on Indian Financial Relations, 1896; Civil Service
Superannuations, 1902; and Militia and Volunteers, 1903.

[426] _Report from the Select Committee on National Expenditure_, 1902;
q. 1,567 to 1,569, and 1,823 to 1,825.

[427] _Report from the Select Committee on National Expenditure_, 1902;
q. 2,081 to 2,084.

[428] In 1905 Mr. Chalmers was made Assistant Secretary to the Treasury.

[429] _Report from the Select Committee on National Expenditure_, 1902;
q. 615 to 618.

[430] _Report from the Select Committee on National Expenditure_, 1892;
q. 2,406 to 2,419, and 2,502.

[431] _Second Report of the Royal Commission on Civil Establishments_,
1888; q. 10,683 to 10,684.

[432] _Report from the Select Committee on Post Office_ (_Telegraph
Department_), 1876; q. 5,397 to 5,600.

[433] _Hansard's Parliamentary Debates_, February 18, 1873, p. 632 and
following.

[434] _Third Report from the Select Committee on Civil Services
Expenditure_, 1873; q. 4,672 to 4,768.

CHAPTER XIX

CONCLUSION

A large and ever increasing number of us are adherents of the political
theory that the extension of the functions of the State to the
inclusion of the conduct of business ventures will purify politics
and make the citizen take a more intelligent as well as a more active
part in public affairs. The verdict of the experience of Great Britain
under the public ownership and operation of the telegraphs is that that
doctrine is untenable. Instead of purifying politics, public ownership
has corrupted them. It has given a great impetus to class bribery, a
form of corruption far more insidious than individual bribery. With one
exception, wherever the public ownership of the telegraphs has affected
the pocket-book interests of any considerable body of voters, the
good-will of those voters has been gained at the expense of the public
purse. The only exception has been the policy pursued toward the owners
of the telephone patents; and even in that case the policy adopted was
not dictated by legitimate motives.

The nationalization of the telegraphs was initiated with class bribery.
The telegraph companies had been poor politicians, and had failed to
conciliate the newspaper press by allowing the newspapers to organize
their own news bureaux. The Government played the game of politics much
better; it gave the newspapers a tariff which its own advisor, Mr.
Scudamore, said would prove unprofitable. No subsequent Government has
attempted to abrogate the bargain, though the annual loss to the State
now is upward of $1,500,000.

The promise to extend the telegraphs to every place with a money
order issuing Post Office was given in ignorance of what it would
cost to carry out that promise. But the adherence to the policy until
an anticipated expenditure of $1,500,000 had risen to $8,500,000 was
nothing more nor less than the purchase of votes out of the public
purse. Not until 1873 did the Government abandon the policy that
every place with a money order issuing Post Office was entitled to
telegraphic service.

When the House of Commons, in March, 1883, against the protests of the
Government passed the resolution which demanded that the tariff on
telegrams be cut almost in two, the Government should have resigned
rather than carry out the order. The Government's obedience to an order
which the Government itself contended would put a heavy burden on the
taxpayer for four years, was nothing more nor less than the purchase of
Parliamentary support out of the public purse. No serious argument had
been advanced that the charge of 24 cents for 20 words was excessive.
The argument of the leader of the movement for reduction, Dr. Cameron,
of Glasgow, was a worthy complement to the argument made in 1868 by Mr.
Hunt, Chancellor of the Exchequer, to wit, that telegraphing ought to
be made so cheap that the illiterate man who could not write a letter
would send a telegram. Dr. Cameron argued that "instead of maintaining
a price which was prohibitory not only to the working classes but also
to the middle classes, they ought to take every means to encourage
telegraphy. They ought to educate the rising generation to it; and he
would suggest to the Government that the composing of telegrams would
form a useful part of the education in our board schools."

Parliament after Parliament, and Government after Government has
purchased out of the public purse the good-will of the telegraph
employees. Organized in huge civil servants' unions, the telegraph
employees have been permitted to establish the policy that wages and
salaries shall be fixed in no small degree by the amount of political
pressure that the telegraph employees can bring to bear on Members
of the House of Commons. With the rest of the Government employees
they have been permitted to establish the doctrine that once a man
has landed himself on the State's pay-roll, he has "something very
nearly approaching to a freehold of provision for life," irrespective
of his fitness and his amenableness to discipline, and no matter what
labor-saving machines may be invented, or how much business may fall
off. To a considerable degree the State employees have established
their demand that promotion be made according to seniority rather
than merit. In more than one Postmaster General have they instilled
"a perfect horror of passing anyone over." Turning to one part of the
service, one finds the civil service unions achieving the revocation of
the promotion of the man denominated "probably the ablest man in the
Sheffield Post Office." Turning to another part of the service, one
finds the Postmaster General, Mr. Raikes, "for the good of the service"
telling an exceptionally able man that "he can well afford to wait his
turn." The civil servants, in the telegraph service and elsewhere,
to a considerable degree have secured to themselves exemption from
the rigorous discipline to which must submit the people who are in
the service of private individuals and of companies. Finally, the
civil servants have been permitted to establish to a greater or a
lesser degree a whole host of demands that are inconsistent with the
economical conduct of business. Among them may be mentioned the demand
that the standard of efficiency may not be raised without reimbursement
to those who take the trouble to come up to the new standard; that
if a man enters the service when the proportion of higher officers
to the rank and file is 1 to 10, he has "an implied contract" with
the Government that that proportion shall not be altered to his
disadvantage though it may be altered to his advantage.

Public opinion has compelled the great Political Parties to drop
Party politics with regard to the State employees, and to give them
security of tenure of office. But it permits the State employees to
engage in Party politics towards Members of Parliament. The civil
service unions watch the speeches and votes of Members of the House of
Commons, and send speakers and campaign workers into the districts of
offending Members. In the election campaigns they ask candidates to
pledge themselves to support in Parliament civil servants' demands.
Their political activities have led Mr. Hanbury, Financial Secretary
to the Treasury in 1895 to 1900, to say: "We must recognize the fact
that in this House of Commons, public servants have a Court of Appeal
such as exists with regard to no private employee whatever. It is a
Court of Appeal which exists not only with regard to the grievances of
classes, and even of individuals, but it is a Court of Appeal which
applies even to the wages and duties of classes and individuals, and
its functions in that respect are only limited by the common sense
of Members, who should exercise caution in bringing forward cases of
individuals, because, if political influence is brought to bear in
favor of one individual, the chances are that injury is done to some
other individual.... We have done away with personal and individual
bribery, but there is still a worse form of bribery, and that is when
a man asks a candidate [for Parliament] to buy his vote out of the
public purse." The tactics employed by civil servants have led the
late Postmaster General, Lord Stanley, to apply the terms "blackmail"
and "blood-sucking." The conduct of the House of Commons under civil
service pressure has led Mr. A. J. Balfour, the late Premier, to
express grave anxiety concerning the future of Great Britain's civil
service. It has led Mr. Austen Chamberlain, Representative of the
Postmaster General, to say that Members of both Parties had come to
him seeking protection from the demands made upon them by the civil
servants. On another occasion it has led Mr. Chamberlain to say: "In a
great administration like this there must be decentralization, and how
difficult it is to decentralize, either in the Post Office or in the
Army, when working under constant examination by question and answer in
this House, no Honorable Member who has not had experience of official
life can easily realize. But there must be decentralization, because
every little petty matter cannot be dealt with by the Postmaster
General or the Permanent Secretary to the Post Office. Their attention
should be reserved in the main for large questions, and I think it is
deplorable, absolutely deplorable, that so much of their time should
be occupied, as under the present circumstances it necessarily is
occupied, with matters of very small detail because these matters of
detail are asked by Honorable Members and because we do not feel an
Honorable Member will accept an answer from anyone but the highest
authority. I think a third of the time--I am putting it at a low
estimate--of the highest officials in the Post Office is occupied in
answering questions raised by Members of this House, and in providing
me with information in order that I may be in a position to answer the
inquiries addressed to me" about matters which "in any private business
would be dealt with by the officer on the spot, without appeal or
consideration unless grievous cause were shown."

The questions of which Mr. Austen Chamberlain spoke, at one end of the
scale are put on behalf of a man discharged for theft, at the other end
of the scale on behalf of the man who fears he will not be promoted.
The practice of putting such questions not only leads to deplorable
waste of executive ability, it also modifies profoundly the entire
administration of the public service. Lord Welby, the highest authority
in Great Britain, in 1902 testified that it was the function of the
Treasury to hold the various Departments up to efficient and economical
administration. But that the debates in the Commons not only weakened
the Treasury's control over the several Departments, but also made the
Treasury lower its standards of efficiency and economy. He added that
in the last twenty or twenty-five years both Parties had lost a great
deal of "the old spirit of economy," and that at the same time "the
effective power of control in the Chancellor of the Exchequer had been
proportionately diminished." In former times the Chancellor of the
Exchequer had been "paramount, or very powerful in the Cabinet." Upon
the same occasion, Sir George H. Murray was called to testify, because
"in the official posts he had held, particularly as Private Secretary
to the late Prime Minister, Mr. Gladstone, he had had frequent
opportunities for observation not only of the reasons for expenditure,
but of the control exercised over it in Parliament." Sir George H.
Murray said: "But I think the whole attitude of the House itself toward
the public service and toward expenditure generally, has undergone a
very material change in the present generation.... Of course, the House
to this day, in the abstract and in theory, is very strongly in favor
of economy, but I am bound to say that in practice Members, both in
their corporate capacity and, still more, in their individual capacity,
are more disposed to use their influence with the Executive Government
in order to increase expenditure than to reduce it." Sir John Eldon
Gorst testified in 1902: "But although the Civil Service head of the
office has a very great motive to make his office efficient, because
his own credit and his future depend on the efficiency of his office,
he has comparatively little motive for economy. Parliament certainly
does not thank him; and I do not know whether the Treasury thanks
him very much; certainly his colleagues do not thank him.... I think
anybody who has any experience of mercantile offices, such as a great
insurance office, or anything of that kind, would be struck directly
with the different atmosphere which prevails in a mercantile office and
a Government office.... I have no hesitation in saying that any large
insurance company, or any large commercial office of any kind is worked
far more efficiently and far more economically than the best of the
Departments of His Majesty's Government."

Sir John Eldon Gorst might have added that the Civil Service head of a
Department really had only rather moderate power to enforce economy.
Before the Royal Commission of 1888, Lord Welby [then Sir Welby],
Permanent Secretary to the Treasury, was asked: "But you would hardly
plead the interference of Members of Parliament as a justification for
not getting rid of an unworthy servant, would you?" Lord Welby, who had
been in the Treasury since 1856, replied: "It is not a good reason,
but as a matter of fact it is powerful. The House of Commons are our
masters."

* * * * *

In the hands of a commercial company, the telegraphs in the United
Kingdom would yield a handsome return even upon their present cost to
the Government. That is proven beyond the possibility of controversy
by the figures presented in the preceding chapters. In the hands
of the State, in the period from 1892-93 to 1905-06, the operating
expenses alone have exceeded the gross receipts by $1,435,000. If one
excludes, as not earned by the telegraphs, the $8,552,000 paid the
Government by the National Telephone Company in the form of royalties
for the privilege of conducting the telephone business in competition
with the State's telegraphs, the excess of operating expenses over
gross receipts will become $9,987,000. That sum, of course, takes no
account of the large sums required annually to pay the interest and
depreciation charges upon the capital invested in the telegraph plant.

On March 31, 1906, the capital invested in the telegraphs was
$84,812,000. To raise that capital, the Government had sold $54,300,000
of 3 per cent. securities, at an average price of about 92.3; and for
the rest the Government had drawn upon the current revenue raised by
taxation. On March 31, 1906, the unearned interest which the Government
had paid upon the aforesaid $54,300,000 of securities had aggregated
$22,530,000, the equivalent of 26.5 per cent. of the capital invested
in the telegraphs. Upon the $30,500,000 taken from the current revenue,
the Government never has had any return whatever.

* * * * *

The nationalization of the telegraphs has corrupted British politics
by giving a great impetus to the insidious practice of class bribery.
It also has placed heavy burdens upon the taxpayers. But that is not
all. The public ownership of the telegraphs has resulted in the State
deliberately hampering the development of the telephone industry. That
industry, had the Government let it alone, would have grown to enormous
proportions, promoting the convenience and the prosperity of the
business community, as well as giving employment to tens of thousands
of people. In the year 1906, only one person in each 105 persons in
the United Kingdom was a subscriber to the telephone; and the total of
persons employed in the telephone industry was only some 20,000. On
January 1, 1907, one person in each 20 persons in the United States was
a subscriber to the telephone.

Under the telephone policy pursued by the Government, the National
Telephone Company down to the close of the year 1896 for all practical
purposes had no right to erect a pole in a street or lay a wire under a
street. As late as 1898, not less than 120,000 miles of the company's
total of 140,000 miles of wire were strung from house-top to house-top,
under private way-leaves which the owners of the houses had the right
to terminate on six months' notice. Inadequate as it was, the progress
made by the National Telephone Company down to 1898 was a splendid
tribute to British enterprise.

The necessarily unsatisfactory service given by the National Telephone
Company, down to the close of 1898, created a prejudice against
the use of the telephone which to this day has not been completely
overcome. Again, the Government to this day has left the National
Telephone Company in such a position of weakness, that the Company has
been unable to brave public opinion to the extent of abolishing the
unlimited user tariff and establishing the measured service tariff
exclusively. On the other hand, it is an admitted fact that the
telephone cannot be brought into very extensive use except on the basis
of the measured service exclusively.

The British Government embarked in the telegraph business, thus putting
itself in the position of a trader. But it refused subsequently to
assume one of the commonest risks to which every trader is exposed, the
liability to have his property impaired in value, if not destroyed, by
inventions and new ways of doing things. In that respect the British
Government has pursued the same policy that the British Municipalities
have pursued. The latter bodies first hampered the spread of the
electric light, in large part for the purpose of protecting the
municipal gas plants; and subsequently they hampered the spread of the
so-called electricity-in-bulk generating companies, which threatened to
drive out of the field the local municipal electric light plants.

Very recently the British Government has taken measures to protect its
telegraphs and its long distance telephone service from competition
from wireless telegraphy. It has refused an application for a license
made by a company that proposed to establish a wireless telegraphy
service between certain English cities. The refusal was made "on
the ground that the installations are designed for the purpose
of establishing exchanges which would be in contravention of the
Postmaster General's ordinary telegraphic monopoly." In order to
protect its property in the submarine cables to France, Belgium,
Holland and Germany, the Government has inserted in the "model
wireless telegraphy license" a prohibition of the sending or receiving
of international telegrams, "either directly or by means of any
intermediate station or stations, whether on shore or on a ship at
sea." In short, the commercial use of wireless telegraphy apparatus the
Government has limited to communication with vessels.

* * * * *

In one respect the nationalization of the telegraphs has fulfilled the
promises made by the advocates of nationalization. It has increased
enormously the use of the telegraphs. But when the eminent economist,
Mr. W. S. Jevons, came to consider what the popularization of the
telegraphs had cost the taxpayers, he could not refrain from adding
that a large part of the increased use made of the telegraphs was of
such a nature that the State could have no motive for encouraging
it. "Men have been known to telegraph for a pocket handkerchief,"
was his closing comment. Mr. Jevons had been an ardent advocate of
nationalization. Had he lived to witness the corruption of politics
produced by the public ownership of the telegraphs, his disillusionment
would have been even more complete.

* * * * *

From whatever viewpoint one examines the outcome of the nationalization
of the telegraphs, one finds invariably that experience proves the
unsoundness of the doctrine that the extension of the functions of
the State to the inclusion of the conduct of business ventures will
purify politics and make the citizen take a more intelligent as well
as a more active part in public affairs. Class bribery has been the
outcome, wherever the State as the owner of the telegraphs has come
in conflict with the pocket-book interest of the citizen. One reason
has been that the citizen has not learned to act on the principle of
subordinating his personal interest to the interest of the community as
a whole. Another reason has been that the community as a whole has not
learned to take the pains to ascertain its interests, and to protect
them against the illegitimate demands made by classes or sections of
the community. There is no body of intelligent and disinterested public
opinion to which can appeal for support the Member of Parliament who
is pressed to violate the public interest, but wishes to resist the
pressure. The policy of State intervention and State ownership does
not create automatically that eternal vigilance which is the price not
only of liberty but also of good government. One may go further, and
say that the verdict of British experience is that it is more difficult
to safeguard and promote the public interest under the policy of State
intervention than under the policy of _laissez-faire_. Under the degree
of political intelligence and public and private virtue that have
existed in Great Britain since 1868, no public service company could
have violated the permanent interests of the people in the way in which
the National Government and the Municipalities have violated them
since they have become the respective owners of the telegraphs and the
municipal public service industries. No public service company could
have blocked the progress of a rival in the way in which the Government
has blocked the progress of the telephone. No combination of capital
could have exercised such control over Parliament and Government as
the Association of Municipal Corporations has exercised. Finally, no
combination of capital could have violated the public interest in such
manner as the civil service unions have done.

INDEX

Abolition terms given to persons reorganized out of service, 262, 263;
premium on inefficiency, 264

Absolute dismissal, Power of, in a public department would increase
efficiency, 247-48

Acland-Hood, Sir A., on election losses to supporters of Conservative
Ministry, 9;
on loss of seats and votes, 242, 243

Administration, Interference of Members of the House with, 132, 135,
139-40

Administrative acts, How answers to questions about, are framed, 278

Allshire, W. H., Pension asked for, by Mr. Crean, M. P., 314

Ambrose, W., disgusted at civil service pressure, 145

Ansell, C. J., Complaint by, 286

Applications or communications, Post Office rule for making, 319-20

Arnold, ----, promoted by merit, 280-81

Association of Municipal Corporations controls Parliament more than
capital, 392

Australia, Offensive officials forced out of office in, 228;
promotion in, 289

Auxiliary staff, Grievance of the, 155

Badcock, J. C., before Tweedmouth Committee, 167-68, 296;
on redundant first class newspaper sorters in Post Office, 258-59;
on squeezing through, 280;
on promotion, 290;
on Roberts case, 309;
on Worth case, 312;
on the malingerers' grievance, 357-58

Balcarres, Lord D. L., on election pledges, 9;
on specific pledges, 242

Balfour, A. J., Anxiety of, for the public service, 199-200

Bartley, Sir G. C. T., intervened for one Canless dismissed as
unfit, 313

Baxter, W. E., on a six-hour day, 324-25;
on travelling expenses of county court judges, 354;
on pressure brought by Members of Parliament on Financial
Secretary, 374-77

Bayley, Thomas, asks for a Select Committee, 198;
motion lost, 201;
second motion of, 205;
on rights of the House, 211

Beaufort, ----, postmaster at Manchester, Error of, in granting
hours of work, 328

Belgian State Telegraphs run at a loss, 22;
Rate Table, 23n

Belgium, Percentage of personal and social messages in, 18;
number of offices in, 19;
figuring cost in, 20;
experience of, 21-24, 28;
Telegraph introduced in, by British company, 38;
Government of, appropriates the new industry, 38;
statistics, 42;
increased use in, 51;
telegrams to inhabitants, 53

Betting on horse races subsidized, 124-26

Birmingham, Extension of service in, 77-78

Blackmail and blood-sucking methods employed, 232, 233, 383

Blackwood, Sir S. A., recommends new newspaper tariff, 120-21;
answers questions on increase of salaries under Fawcett, 136-37;
on removal of inefficient employees, 250-51;
advice from, refused by Mr. Raikes, 275;
on trades union spirit among clerks, 302-3

Booth, Charles, member of Bradford Committee, 213, 214

Bortlewick, Sir A., on Parliamentary interposition, 144

Boulden, Alfred, presented telegraphists' grievances as to
pensions, 356

Bowles, Gibson, on pressure on members, 203

Bradford, Sir Edward, Chairman of Bradford Committee, 213, 214

Bradford Committee, Report, 214-25, 359;
question submitted to it, 214;
ignores its reference, 214-15;
reports its failure, 215;
ignored rules of procedure, 216;
declared comparison impossible, 216;
reported widespread discontent, 218, 221;
greater pressure of work, 219;
statements unsupported by evidence, 219;
recommended large increase of expenditure, 221;
not acceptable to Post Office workers, 221;
Lord Stanley on, 222-24;
rejected by Balfour Government, 225;
before the House, 233

Bradlaugh, Charles, intervenes for promotion of eleven men passed
over, 283-85, 296, 305

Breakdown, Causes of, 217n

Bribery, Personal, replaced by class, 246, 382

British and Irish Magnetic Company reported shilling rate
unremunerative, 33

British and Irish Magnetic Telegraph Company formed, 39-40;
messages carried by, and receipts, 50-51;
Government purchase of, 58

British Telegraph Company, 39-40

British telegraphy, History of, 37-41

Brodrick, Thomas, member of Bradford Committee, 213, 214

Brown, R. H., Interference for, 296

Burbridge, R., member of Bradford Committee, 213, 214

Business methods not applicable in State service, 215, 222, 229-30

Business ventures, State control of, an untenable doctrine, 378, 390-91

Buxton, Sydney, moved a Select Committee on Post Office Servants,
241-42;
on case of T. Reilly, 308;
on number of applications by members of the Commons, 316

Cable between Dover and Calais, 39

Cameron, Dr. Charles of Glasgow, and rates for messages, 5;
resolution offered by, 105n;
remarks on, 105-7;
opposed, 107;
on increase of business without increase of cost, 107-8;
his resolution passed, 108;
increase of mileage and operators under, 108;
Bill to give effect to, and results, 108-10;
argument of, 380

Campbell, John, Intervention by, to reopen case eight years old, 314

Campbell-Bannerman, Sir Henry, on election pledges, 10, 242-43

Capital, Very little new, invested after 1865, 40-41

Capital invested, how raised, 89;
sums on which revenue would have paid interest, 90, 104

Cavendish, Lord Frederick, debate on Fawcett revision of wages, 132;
letter on agitation in postal service for increased wages, 133-34

Chamberlain, Joseph Austen, on promotions and concessions, 203-5;
would not throw responsibility on House of Commons, 206-7;
had personally considered all complaints made to him, 207;
petty grievances, 208-9;
members had asked him to protect them from pressure of employees,
209;
opposed to thrusting details on a Committee, 210;
proposed to get advice of business men on scale of wages of four
classes, 210;
names the Bradford Committee, 213;
asks for a non-party vote, 234-36;
replies to Mr. Nannetti's interventions, 293-94;
on decentralization of administration in Post Office, 318-20,
383-84;
rule for making applications, 319-20;
on wages of postmen at Newton Abbott, 329;
refuses to force retirements, 339;
on duties of secretaries of the Treasury, 361-62;
on pressure for expenditure, 368-69

Chambers of Commerce, British, Demands of, for lower charges on
telegraphic messages, 3-4, 81;
agitation by, for State purchase of telegraph properties, 13

Chancellor of the Exchequer, Influence of, weakened, 364, 384-85

Charges, lower, and better service, Promise of, 19;
irrespective of distance, 19

Cheeseman, ----, dismissed for political activity, 183

Childers, H. C. E., opposed reduction of charges for telegrams, 107

Churchfield, Charles, Misrepresentations made by, 159-60;
on the Roberts case, 309-10

Citizen, Upbuilding the character and intelligence of the
individual, 12

Civil Establishments, Royal Commission on, Testimony of Sir Charles
Du Cane before, on dismissal of incompetent public employees, 249-50

Civil servants, Problem of a large body of, in a Democracy, 3;
in revenue departments, enfranchised, 6, 96;
organized for political influence, 7;
culmination of demands of, on House of Commons, 8;
on efforts of, to secure exemption from business standards of
efficiency and discipline, 10-11;
undue influence of in House of Commons, 11-12;
danger from increasing number of, not considered, 6, 94;
disfranchised in three departments, 94;
G. W. Hunt on, 96-97;
Mr. Gladstone on, 97-98;
circularize members of Parliament, 147;
warned by Postmaster General, 148;
right of appeal conceded to, 148;
campaign of education, 158-60;
positions as, sought and retained, 161-62;
Government compromises with, 163;
too much political pressure from, 177, 188-89;
disfranchisement of suggested, 178;
concessions to by Norfolk-Hanbury Committee, 180;
demand right to agitate, 183-87;
Commons the Court of Appeal for, 184-85, 205;
disfranchised at their own request, 185;
ask new judgment on old facts, 188;
have friends in the Commons, 190;
Commons reminded of their votes, 196;
pressure from, intolerable, 197, 203, 238-39;
hosts of non-economical demands granted to, 381;
political activities of, 382

Civil Service should be kept out of politics, 234-36;
a Prime Minister on the, 237-38;
spirit of the, 323-59;
implied contract between the State and the, 324, 381

Civil Service head of an office can alone influence expenses, 369;
not thanked for services, 369, 385, 386

Civil Service pressure, The Treasury on, 132-34;
evidence as to in 1888, 137-40;
Earl Compton's part in, 142-43, 145;
W. Ambrose disgusted at, 145

Civil Service unions, Intervention of, in behalf of the individual,
245, 246;
opposed promotion by merit, 267-68;
active in election campaigns, 382;
more injurious to public interest than any combination of capital,
392

Civil Services Expenditure, Select Committee on, 1873, Testimony of
Sir Wm. H. Stephenson before, on dismissal of State servants, 247;
testimony given before, 373

Claims of the telegraph companies, 72

Class, R. W. Hanbury on a new social, 188

Class bribery displacing personal, 246;
a result of public ownership, 378, 387, 391

Class grievances, Spirit of trades unionism evoked for, 303

Class influence in House of Commons the great reproach of the
Reformed Parliament, 6-7, 97-98

Class interests, The Commons the champion of, 366-68

Class legislation to be avoided, 12

Cleghorn, J., on power of the Treasury, 370-71

Clerks, Lower division, Salaries of, 170n

Clery, ----, dismissed for political activity, 183, 185;
on political pressure, 186

Cochrane-Baillie, C. W. A. N., Query of, on press telegrams, 122

Commission on Civil Establishments, The Royal, on pressure for
increased wages, 137-40

Committee of the Indoor Staff, Report of, the basis for the Raikes'
revision of wages, 41;
not approved by civil servants, 142-43

Committee on Revenue Department Estimates, Questions of chairman of,
on salary increase under Fawcett, 136-37

Committee to ascertain profits of telegraph companies, 72

Competition, Alleged wastefulness of, 53-54

Compton, Earl W. G. S. S., a representative of Post Office
employees, 142;
demands a Select Committee, 143, 145, 151;
intervened for a sorter reduced for cause, 314

Consolidation of telegraph companies, Argument for, 54-55;
the companies' proposal, 56

Continuous counting of sporting messages, 125-26

Cooke and Wheatstone's inventions purchased, 38

Cornwell, ----, Case of, 257

Cost, No explanation of discrepancies between estimates and actual,
80

Counter men, Risk allowance for, 349

Crompton episode, The, 291-92

Crosse, F. T., complains against promotion by merit, 284-85;
on retention of pensioners in service, 340

Customs Revenue Department, Complaints about promotion in, 288n

Danish Government reports on users of telegraph, 17

Davies, H. A., on right to fixed rate of promotion, 335-36

Davis, R. H., on action of Post Office authorities, 228

Davis, R. S., announces concessions made by Postmaster General, 10

Day, Implied contract for six hour, 324-28;
W. E. Baxter on, 324-25;
Sir R. E. Welby on, 335-26;
H. H. Fowler on, 326;
Sir T. H. Farrer on, 327-28

Decentralization of administration, Necessity of, in Post Office,
318-20, 383

Depreciation of plant, Cost of, 79

Discipline, Proper, should be preserved, 149;
typical cases of enforced leniency in, 306-18

Discontent in Postal and Telegraph Service, 150-51, 158;
emphasized by A. K. Rollit, 174-76;
widespread, 218;
premium on, 222

Disfranchisement of civil servants suggested, 178

Disraeli, Benjamin, on civil servants, 95-96, 184

Disraeli Ministry, Concessions of the, 4;
made inadequate investigation of cost of nationalization, 57-58;
replaced by the Gladstone Ministry, 73;
protest of, against enfranchising civil servants in revenue
departments, 6, 95-96

Dobbie, Joseph, intervenes against dual duty at Glasgow, 347-48

Dockyard laborers not disfranchised, 96

Dual duty men, 285-86

Du Cane, Sir Charles, on getting rid of incompetent public
employees, 249-50;
on promotion by merit in the Customs, 273

Duplex telegraphy, 93

Eastern Telegraph Cable Company, Work required by, 169

_Economist, The_, on nationalization, 61;
on Bradford Committee Report, 216

Economy, Parliament has never an influence for, in expenditure for
education, 320;
change of public opinion toward, 364-65;
a voice in defence of, wanted, 367-68, 373

Edinburgh, Extension of service in, 78

Edinburgh Chamber of Commerce leads in demand for lower charges, 3,
5, 81

Electoral disabilities, Acts for relief of, 184n

Electric and International Telegraph Company, Rates, 29-30n;
organized, 38;
first dividend declared, 39;
growth of, and prices 190;
paid ten per cent., 41;
messages carried by, and receipts, 50;
Government purchase of, 58;
earnings of the, 60, 74, 85;
shares of, did not rise, 70

Electric light, Spread of the, hampered, 389

English companies, Experience of, 29-35

Equality, Mechanical, demanded, 341;
not opportunity, 343

Examination of first class telegraphists for promotion, 330-31

Executive ability, Deplorable waste of, by intervention, 318-19,
383-84

Executive's power of dismissal, Curtailment of, 245-66;
power of promotion curtailed, 267-301

Expense, Enormous increase of, 146, 151, 160-61, 180, 200

Expenses, operating, Cost of, to State, 49;
estimated cost of, 84-85;
under-estimated by one-half, 88-89;
proportion of, to gross revenue, 89n;
augmented, 103;
average per telegram, 103n;
increase through raise in wages, 105

Extension of telegraph service, 77-80;
estimated cost of, 49;
estimated _vs._ actual expenditure for, 78-79;
effect of, unremunerative, 99

Farrer, Sir T. H., on real difficulty of public service in getting
rid of bad men, 253-55, 256;
declared promotion by routine the real evil, 271;
put proper men at the top, 272;
on a six or seven hour day, 327-28

Fawcett, Henry, increased pay of telegraph operators, 131;
on increased salaries of telegraph employees, 135-36;
horror of passing over any one, 279, 306;
created class of telegraph clerks, 328;
class of senior telegraphists, 329

Fawcett Association, Pledge contained in circular issued by the,
148n

Fawcett Revision of wages, 1881, 131, 137, 152;
increased expenditures from, 160-61

Fay, Samuel, member of Bradford Committee, 213, 214

Feasey, E. C., Intervention for, by J. Ward, 316-17

Fergusson, Sir James, on political circulars issued by civil
servants, 147-48;
issues a warning, 148;
on proper discipline, 149;
on conditions in the Civil Service, 163;
on employees taking part in politics, 183-84

Financial failure of State telegraphs, Reasons for, 99, 103-10

Financial Secretary, Duties of the, 361, 363

Fischer, H. C., before Tweedmouth Committee, 167-68, 169-70;
on examination of telegraphists, 330-31;
on optional retirement at fifty, 356

Fisher, Hayes, on public expenditure, 365

Foreign experience in State operation, 17;
summary, 28

Foreign messages profitable in Belgium, 22;
in Switzerland, 24

Foreman, B. J., Pension asked for, by L. Sinclair, 314

Foster, M. H., on claims for reversionary rights, 70-71

Fowler, Sir H. H., on the tone in the House, 278;
protests against Postmaster General sitting in House of Lords,
304;
on a six or seven hour day, 326

Fowler, W., on contingent liabilities, 75, 76

France, Government of, appropriates the telegraph, 38;
increased use in, 51

France, Percentage of personal and social messages in, 18;
number of offices in, 19, 20

Freehold of provision for life, Employee of the State has, 247, 380

French experience, 26, 28

French State telegraphs run at loss, 26

Garland, C. H., on service rendered by T. Bayley, 228

Giffen, Robert, on pensions to men reorganized out of service, 264

Gladstone, W. E., on class influence in House of Commons, 6-7, 97-98;
on securing pledges from candidates, 149;
rescinds Fergusson's warning, 150;
tribute of, to Joseph Hume, 371-74a

Gladstone Ministry, 73

Glasgow, Extension of service in, 78

Glasgow postmaster's mistake, 269-70

Godley, Sir A., member of Tweedmouth Committee, 163, 165

Goldsmid, J., on overmanning offices, 371

Gorst, Sir John Eldon, on expenditure of public money on education,
320;
on mismanagement arising from intervention of House of Commons,
322;
on power of Treasury to make inquiries not exercised, 369;
on efficiency in business and government offices, 370, 385-86

Goschen, G. J., on the evidence before Select Committee, 65-66;
on reversionary rights of the railways, 66-67;
questioned Mr. Scudamore on his estimates, 86-87

Government, The problem of, and its solution, 12

Government, The, ignorant of relations between telegraph companies
and railways, 57-58;
obliged to purchase reversionary rights, 64;
should have resisted demands of railways, 69;
its estimate of total sum, 72.

Government clerks, Scale of wages for, recommended by Playfair
Commission, 130

Governments, The visible helplessness of, 359

Gower, G. G. Leveson, Questions of, on promotion, 269

Graves, Edward, on promotion for ability, 270

Green, James, on cases of Richardson and Walker, 290-91

Grievance, Abolition of a, in turn a grievance, 342

Grievances, Typical, 306-18

Grimston, Robert, on consolidation of telegraph companies, 54-55

Groves, J. G., Intervention by, 315

Guarantees required for new telegraph offices, 99, 100-1;
check on log-rolling, 101;
agitation for reduction of, 102-3

Hamilton, Sir Edward, on support of Treasury in House of Commons, 368

Hanbury, R. W., on penny postage, 124;
to Postmaster General, 172-73;
on political pressure, 176-79;
cost of concessions, 180;
on political influence and pressure, 184-87, 382;
on Steadman's motion, 187-89;
on wages of employees, 192;
opposed new Committee, 193, 197;
denounces Civil Service pressure as intolerable, 197;
on "soft heartedness" on the part of heads of departments, 253;
on framing answers to questions from members, 278;
would represent Postmaster General in House of Commons only
conditionally, 304

Harcourt, Sir W., on Post Office employees, 238-39

Hardie, J. Keir, on concessions of Tweedmouth Committee, 202-3;
intervention by, 299-300, 314;
for specific retirements, 339

Harley, H., offers telegraphers chance to learn postal work, 344-45

Harrison, ----, Case of, 159

Hartington, Marquis of, presents a Bill for purchase money, 73;
on the bargain, 73-74, 76;
erroneous estimates of, 73, 79, 80-81, 87n

Harvey, A. S., on probationary period of service, 260;
on trades union spirit, 302

Hay, C. G. D., Intervention by, for telegraphists, 337-38

Heaton, J. H., on political patronage, 237-40;
censured by constituents, 240

Hegnett, ----, promoted by merit. Interference in case of, 284

Helsby, ----, promoted by merit. Interference in case of, 284

Henderson, A., intervened for one Chandler, 348

Hill, E. B. L., Testimony before Tweedmouth Committee, 137;
against and for amalgamation of telegraphers into one class, 343

Hill, Lewin, on yielding to Civil Service pressure, 142;
on increased expenditures, 160n;
on Civil Service positions, 162n;
no service like the public service, 166-67;
recommendation to Tweedmouth Committee, 167;
on comparison of postmen with other classes of employment, 257-58;
on messenger boys in Post Office Department, 261

Hobhouse, C. E. H., Intervention by, 300

Hobson, Mr., postmaster at Glasgow, obliged to promote by seniority,
269;
mistake of, 270

Holidays, Tweedmouth Committee on, 350;
Sir R. E. Welby on, 351;
news distributors' complaint about, 352-53

Horse races, Betting on, subsidized, 124-26

House of Commons, Intervention of members of, on behalf of public
servants, 10-11;
the Court of Appeal for civil servants, 184-85, 205, 382;
reminded of civil servants' votes, 196;
omnipotent, 199;
responsibility resting on, 200;
members of coerced, 203;
asked to purchase votes, 232;
thirty threatened with loss of seats, 239-40;
majority of members pledged, 241;
under pressure from the Civil Service unions, curtails Executive's
power to dismiss incompetent and redundant employees, 245-66;
intervention of on behalf of individuals through Civil Service
unions, 246;
is master of public departments, 252-53;
pressure of members on heads of departments, 253-55;
the tone in the, 277;
stimulus of a question in the, 286;
stands for extravagance, 360-77;
the champion of class interests, 366;
debates in, weaken hands of Treasury, 368, 384;
constant pressure from, on Financial Secretary for class
interests, 373-77

Hume, Joseph, W. E. Gladstone's tribute to, as a defender of economy
in expenditure, 371-74

Hunt, G. W., calls Mr. Scudamore author of Bill to acquire
telegraphs, 14;
on uses of telegraph, 17;
on estimated cost of and revenue from the telegraphs, 58;
on the terms of purchase, 63;
on purchase of reversionary rights, 64;
on civil servants, 96-97

Incompetents, Difficulty of removing, 247-57, 259;
reorganized out of service on pensions, 262-63;
cost of pensions to, 263;
juniors doing work of, 270

Indictment against telegraph companies, 15

Individual grievances, Interference for, 303

Industry, A ready-made, acquired, 5

Inland messages, Loss on, in Belgium, 21-22;
in Switzerland, 24-26

Inland telegrams, Low rates on, 21;
losses incurred by, 22

Inland traffic, Attempt to develop in Belgium, 21-22;
in Switzerland, 25

Inquiry, Scope of the, 3-12

Inspection of education, 320-22

Inspectors, Educational, Difficulties of, 321-22

Inter-Departmental Committee on Post Office Establishments named,
163-64

Intervention through House of Commons on behalf of individuals,
245-47, 251;
in matters of promotion, 267-68;
by Members an obvious difficulty, 274;
types of, 294-96;
on behalf of individual employees, how managed, 304-5;
special cases of, by members of House of Commons, 293-301, 313-18;
number of, 316;
waste of executive ability from, 318-19;
mismanagement arising from, 322

Irons, H. B., complains of prospects for promotion, 333

Isle of Man cable bought, 81

Jackson, ----, of Kilkenny, Interference for, 298

Jersey and Guernsey cable bought, 81

Jevons, W. S., on the increased use of telegraphs, 52;
on cost of extension, 79;
disillusionment of, 93, 390

Jobbery not the great evil of the service, 271

Johnson, H., Interference for, 296

Jones, W., intervenes for telegraph clerks at Oxford, 346-47;
Lord Stanley's reply to, 347

Joyce, H., on promotions for merit over men not qualified, 279-81;
on case of Robinson, 281-82;
on Wykes case, 283;
on the Bradlaugh episode, 285;
on the Webster case, 307

Joyce, Michael, Intervention by, 296-97

Judges, County Court, Travelling expenses of, 354

Kearley, H. E., demands a Select Committee, 151-54;
declares promotion of telegraphists blocked, 153;
statement of, declared misleading by Mr. Morley, 154-55;
grievances of the auxiliary staff, 155

Kensington, ----, Case of, 290

Kerry, C. H., before Tweedmouth Committee, 168;
on wages and speed of telegraphists, 168-69

Knox, Sir Ralph H., on extravagance in House of Commons, 366-68;
defenders of economy needed, 371

Lacon, telegraphist at Birmingham, Case of, 195-96

_Laissez-faire_, 12;
Alleged breakdown of, 36-56;
a better policy for the public interest than State intervention,
391

Lawson, H. L. W., on interference of members of Parliament in
dismissals from service, 252;
on spirit of trades unionism among clerks, 303-4;
interventions by, 313;
for telegraphists, 336-37

Learners, Promotion of, 291

Leeds, Extension of service in, 77-78

Leeman, G., cross-questions Mr. Scudamore, 65-66n, 68n, 92;
on Mr. Scudamore's estimates of cost of reversionary rights of
railways, 68-69, 76

Letter sorters, Scale of wages for, 349-50

Letter sent, Scudamore's misleading comparison of telegrams with,
52-53

Liberal Party supported demands of civil servants, 8-9

Lickfold, J. R., on medical certificates, 356-58

Lingen, Lord R. R. W., on difficulties in public departments due to
triennial change of Government, 256-257;
on trouble to secure efficiency, 272

Log-rolling by members of House of Commons, 10-11

London and Provincial Telegraph Company, 40;
rates charged by, 40;
Government purchase of, 58

London Central Telegraph Office, Employees not drawn from, 169-70

London District Telegraph Company unsuccessful as result of low
rates charged, 33-35;
rate table, 34n;
notice of, 40

London local telegraph system enlarged, 77

London Trades Council, Complaints from, 159

Lowe, Robert, on the immense price paid, 74-75;
division of the service under, 271

McDonald, G., on grievances of news distributors, 355

Macdonald, J. A. M., questions Mr. Gladstone on Civil Service
pressure, 149;
demands a Select Committee, 150;
motion for, lost, 151

M'Dougall, ----, promoted by merit, 283-84

MacIver, David, on complaints of telegraphists, 131-32

Maddison, F., on a non-official committee, 191

Magnetic Telegraph Company, 39-40

Malingerers' grievance, J. R. Lickfold on the, 357;
J. C. Badcock on, 357-58;
S. Walpole to witness on, 358

Manchester, Extension of service in, 78

Manners, Lord John, on Glasgow postmasters' mistake, 269-70

Mears, ----, Case of, 160

Member of Parliament, Should interference of, in behalf of public
employee, lead to dismissal? 248;
influence of, may annul power of dismissal in public departments,
251

Members of House of Commons intervene in cases of discipline, 302-22

Members of Parliament and the rank and file, 303

Mercer, ----, Interference for, 297

Merchants, General, used telegraphs little, 16

Messages, Annual increase in, 16;
relating to personal affairs an important part of traffic 17-18;
annual increase of, in United Kingdom, 51;
Mr. Scudamore's estimated increase of, 83-84;
fully realized 87;
traffic of, 104;
increase in number of, 110, 111;
sent to individual newspapers, 122n;
annual loss on newspaper, 119-20, 122, 123;
delivered to newspapers, 124n;
remained nearly stationary, 153n;
increase of, 181

Mileage of telegraph lines in United Kingdom, 43-44, 45n;
of extension, 80, 81n;
increase of, through reduction of tariff, 108

Mitford, F., Power of dismissal in public departments may be
annulled by pressure from individual members of Parliament, 251

Money order issuing Post Office, A telegraph office promised at
every, 20

Money order post offices and telegraph facilities compared, 48

Monk, Charles James, introduced and carried Bill to enfranchise
revenue officers, 6, 96;
Mr. Gladstone on the Bill, 6-7

Morgan, ----, Case of, 290

Morley, Arnold, Postmaster General, 149;
on a Select Committee, 150-51;
reply to Mr. Kearley on promotions, 154-55, 157-58;
on civil service positions, 161-62;
on make up of Select Committee, 162-63;
on the Post Office for revenue, 166;
Lords Commissioners of the Treasury to, 172-173;
on passing over men not qualified, 279, 306

Mowatt, Sir F., member of Tweedmouth Committee, 163, 165, 177

Municipalities and National Government as violators of permanent
interests of the people, 391-92

Murphy, Dennis, Interference for, 297

Murray, Sir George H., on change in attitude of House of Commons on
expenditures, 366, 385

Nannetti, J. P., questions promotion of two female telegraphists,
293-95;
interventions by, 295, 297, 317

National Expenditure, Select Committee on, Evidence before in 1892,
on intervention of House of Commons in Departments of State, 363

National Joint Committee of the Postal Association, Resolution of,
against the Bradford Committee, 212

National Telephone Company, Obstacles to development by, 388-89

National Union of Teachers, brings influence against inspectors, 321

Nationalization of the telegraphs, 4;
Scotch as leaders in, 5, 13;
argument for, 13-35;
has increased the use of telegraphs, 390

Newnes, Sir G., Intervention by, 298

News distributors complain about Saturday holiday, 352-53;
other grievances laid before Tweedmouth Committee, 355-56

Newspaper sorters, No work for first class, since 1886, 258-59

Newspapers, Subscription charges to, for press bureau, 113-15;
favored nationalization, 115;
maximum rate demanded by, 116;
yielded by Scudamore, 117;
report of Committee on, 118-19;
loss on service to, 119-20, 122, 123;
messages delivered to, 124n;
given an unprofitable tariff, 379

Nicholson, A. S., on grievances of telegraphists, 334-35

Non-paying telegraph offices, Guarantees required for, 99, 100-1;
misleading tables regarding, 101-2

Norfolk-Hanbury Committee recommended further concessions, 179-80;
work done by, 197;
did not give satisfaction, 218;
increased expenses from, 221

Norfolk-Hanbury compromise, 359

North, A. W., Grievance of, as to female telegraphist, 356

North, Lord Frederick, ordered civil servants to support the
Government, 185

Northcote, Sir Stafford, Disillusionment of, 100

Norton, Capt. C. W., an aggressive champion of civil servants, 11;
on technical examination of telegraphists, 190;
moves a reduction in expenses, 201;
charges Government with breach of faith, 201-2;
motion lost, 205;
on rights of postal servants as voters, 211-12;
moved reduction of Post Office Vote, 233;
on Civil Service agitation, 233-34;
motion lost, 236;
vote, 236n;
made a Junior Lord of the Treasury, 237;
intervention by, 296;
for senior telegraphists, 338, 339

O'Brien, P., Intervention by, 297-98;
for retirements, 339

O'Connor, James, Intervention by, 353

Official documents, List of, used as authorities, 14n

Operators, Increase in number of, to meet reduction of tariff, 108

Overseers in postal service, Relief from duty of, 352

Oxford telegraph clerks secure intervention against dual duty,
346-47

Palmer, G. W., intervened for learners punished for carelessness,
315

Parliament warned against Government's estimates, 65-69, 76;
enacted Purchase Bill, 72;
responsible for telegraph deficits, 91-92;
reduced tariff on telegrams, 91;
not competent to judge, 188-89;
has never an influence for economy, 320.
_See also_ House of Commons

Parliamentary committees, Titles of reports of, 14n

Parliamentary Secretary, Duties of the, 361-62

Parties, Both political, committed to nationalization, 4

Party, Neither, in open alliance with civil servants, 7

Patey, C. H. B., on guaranteed offices, 102;
on operating expenses, 103;
on loss for newspaper service, 119-20, 122;
on telegraph flimsy, 121-22

Penny postage precedent, cited by Mr. Scudamore, 82-83;
profit from, 124, 220

Pensioners, Retired, recalled to service, 340;
protest against before Tweedmouth Committee, 340

Pension system no remedy for getting rid of incompetents, 256

Pensions, State's system of, contrasted with system of London and
North Western Railway, 264

Pensions to the incompetent, Cost of, 263

Permanent Secretary, Duties of the, 363

Personal bribery replaced by class bribery, 246

Playfair, Sir Lyon, Testimony of, before Royal Commission on Civil
Establishments, 139-40;
on infrequency of promotion by merit, 274;
on writers, 353-54

Playfair Commission, Scale of wages for government clerks
recommended by, 130

Pledge contained in circular issued by the Fawcett Association, 148n

Plummer, Sir W. R., intervenes for retirements, 338-39

Political influence, Effect of, on Post Office administration, 305-6

Political pressure not all in one direction, 138;
too much from civil servants, 178, 231-33, 234-35

Politics forces the Government's hand, 58-59

Post Office, The, a revenue department, 166;
denied by A. K. Rollit, 174;
technical work of the, 188;
no part of its duty to make a profit, 205;
net revenue from, 220;
expenses increased, 221

Post Office Department, Complaint of stagnation of promotion in,
152;
Tweedmouth Committee on, 171;
apparent net profits of, 227n;
compelled to deal leniently with violators of rules, 306-320

Post Office employees denied by the Conservative Ministry a Select
Committee on their pay and position, 8;
vote with Liberals, 9;
and secure the Committee, 9;
press House of Commons for increase of wages and salaries, 127-64;
Circular of, objected to by Lord Stanley, 223

Post Office officials can only recommend for promotion, 276

Post Office Servants, Select Committee on, 359

Postal clerks and telegraphists, Comparative chances for promotion
of, 344-45;
Bradford Committee on, 348

Postal servants, Are, fairly paid, 217;
expenditure demands of, called for, 221;
not satisfied with Bradford Committees' recommendations, 221, 229;
demands were "blackmail" and "blood-sucking," 231-32, 233;
largely in hands of agitators, 238-40;
and the general election of 1906, 240-41

Postal Telegraph Clerks' Association, a powerful political
organization, 9;
concessions granted to, 10;
demands adoption of the Bradford Committee Report, 226-27;
meetings of, 228-29, 241

Postal telegraph offices, Increase of, 101;
misleading tables regarding, 102-3

Postmaster General, Concessions made by, 10;
and the party following, 277;
limitations of power of, to promote or to remove, 286-87;
interviewed first in cases of intervention by a member of
Parliament, 304

Postmasters general, Anxieties of, regarding promotions, 279, 280,
306

Postmasters, Demands of, from Tweedmouth Committee, 288;
salaries of, and volume of business, 288

Postmen, W. C. Steadman on grievances of the, 194-95;
Thos. Bayley asks for a Committee on, 198

Postmen, London, Abolition of classification of, 341-42

Preece, W. H., on ignorance of telegraphers, 157;
offers increased pay for technical knowledge, 270

Press Bureau maintained by telegraph companies, 113;
charges for service, 113-15

Press hampers heads of departments in matter of promotions, 268

Price, R. J., sought to intervene in House in a case of promotion,
280

Private enterprise, Adequate results of, 41-42

Private enterprise in telegraphy broken down, 36, 37;
Mr. Scudamore's arguments to prove, 45;
his errors show his failure, 49

Probationers, Difficult to dismiss, 260

Problem of government, The, and its solution, 12

Promotion, Employees claim a vested right to, 153;
misleading table of, 154, 158;
Tweedmouth Committee, on, 170-72;
Bradford Committee on, 230;
E. Graves on preference for, 270;
by routine the real evil, 27, 274;
tact and honesty needed in, 272;
selection of officers for, an invidious task, 306;
right to fix rate of, claimed, 335-36

Promotion by merit hardly takes place, 274;
recommended by the Royal Commission, 275;
regulations for, 276n;
political element in, 277;
anxieties of postmasters general regarding, 279;
cases of, cited, 279-85;
opposed by rank and file, 289;
complaints against, 289-301

Promotion by seniority the great evil, 274;
demand for, widely established, 381

Promotions revoked through pressure from members, 283;
secured for men reported as "not qualified" by influence of C.
Bradlaugh, 283-85

Prussia, Effect of reduced rates on increase of messages in, 17, 18

Public interest promoted by activities of speculator and dividend
seeker, 37

Public opinion, Change of, in matters of public expenditure,
363-366;
no body of intelligent and disinterested, 391

Public ownership a parasite, 37

Public service, British, an attractive haven of refuge, 10-11;
no service like the, 166-67, 229;
three distinguishing features of the, 186-87;
Prime Minister Balfour's anxiety for the, 199-200;
future of the, in peril, 199;
reduced to a dull level of mediocrity, 268

"Public Service" messages, Allowance for value of, 26-27

Purchase by the State, Threat of, arrested extensions, 41

Purchase of the telegraphs, 57-76;
Bill introduced for, 57;
estimated price, 58;
provisions of Bill, 59;
the _Economist_ on, 61;
Scudamore on the terms of, 62;
Hunt on, 63;
amount asked for, 73;
Robert Lowe on government monopoly, 74-75

Purchase price of telegraphs estimated, 58, 63;
of reversionary rights of railways, 64

Raikes, H. C., scheme of increased wages for telegraph employees,
140-41;
rebukes the House for interference, 144;
on the management of his Department, 145-47;
on personal attention of Postmaster General given to cases of
dismissal, 257;
explains a case of promotion by seniority, 275-76, 306

Raikes' Revision of wages and salaries, 1890-91, 140-47, 152;
increased expenditures from, 160-61

Railway companies, M. H. Foster's views on reversionary rights of,
70-71;
Government's proposition to, 71;
cost of the reversionary rights, 75-76;
wires released to, 78

Railways, Reversionary rights of the, in the telegraphs, 57;
purchase of the, necessary, 64;
Mr. Goschen on, 66-67;
Mr. Scudamore's estimates for, erroneous, 68-69;
leases of way-leaves, 69-70

Rates for messages, Control of, lost by the Government, 5, 91, 92;
effect of reduction of, on increase of telegrams, 18;
charged by British companies, 19;
irrespective of distance, not remunerative, 28, 31-35;
Mr. Scudamore's forecasts on, 83-84

Reformed Parliament, Class influence the great reproach of the, 6-7,
97-98

Reilly, Thomas, Case of, 308

Reorganization out of service, 262-66

Representation of the People Bill, 94

Reuter's Telegram Company, Property of, purchased, 73

Revenue, Estimated gross, 84;
net, 86;
proved appalling blunders, 87;
receipts, 88-89;
and interest on capital, 90-91n;
net from messages, 104;
large loss in, 109-10, 111;
a diminished balance of, and increased expense, 146-47, 181

Revenue Department Estimates, Select Committee on, Report on deficit
in Telegraph Department, 110-11

Revenue officers, Enfranchisement of proposed, 94;
opposed by Disraeli, 95;
carried by Mr. Monk, 96;
G. W. Hunt on, 96-97;
favored by Gladstone, 97, 184

Reversionary rights of railway companies, 69-70;
sum paid for, 75;
estimate of, and cost, 76

Richardson, ----, Case of, 290-91

Right, The Sole, to transmit messages by electricity acquired by the
Government, 5

Roberts, ----, auxiliary postman, Case of, 308-9

Robinson, postman at Liverpool, appointed inspector, 281;
case cited as a grievance to Tweedmouth Committee, 282

Rockingham, Marquis of, disfranchised revenue servants at their own
request, 184, 185

Rollitt, Sir Albert K., on demands of telegraphists, 155;
on examinations for promotion, 156;
moved reduction of salary of Post Master General, 173;
endorses complaints, 174-76;
demands a Committee of business men, 176;
withdrew amendment, 179;
reminds Commons of civil servants' votes, 196;
charges breach of contract, 202;
record of, 224;
supported Norton's motion, 234

Ronalds, Mr., attempts to interest British Government in telegraphy,
37

Rothschild, Baron F. de, on civil servants, 143

Royal Commission of 1888 declared promotion by seniority the great
evil, 274

Rutherford, W. W., a merchant in politics, 227

Salary, _see_ Wages

Salisbury Government succeeded by the Gladstone, 149

Samuel, H., intervenes for telegraph clerks at Oxford, 346

Saunders, Mr., on gratuitous sporting messages, 124-25

Schackleton, D. J., Intervention by, 353

School Board of London, Influence of, 321

Schwann, C. E., Intervention by, 298-99

Scudamore, F. I., commissioned to report on private and State
telegraphs, 4, 13;
report of, 14-22;
reports based on incomplete returns, 42-45;
errors in his figures, 44-45, 79, 80;
standards of service, 45-48;
errors of estimate of cost of extension and operation, 49;
misleading comparison of telegrams with letters, 52-53;
failure of his evidence, 54;
argued for State monopoly, 55-56;
previously opposed the same, 56n;
on a Post Office system of telegraphs, 61-62;
on the terms of purchase, 62;
estimated cost, 63, 64;
cross-examination of, 65-66n, 68n;
ignorant of relations between telegraph and railway companies, 68;
report on reorganization of telegraphs, 78n;
estimate of revenue, 63, 81-82;
influence over two ministries, 81;
argues from penny postage, 82;
revenue forecasts, 83-87;
increase of messages, 84;
gross revenue, 84;
working expenses, 84-85;
stood by his
estimates, 86-87;
revenue predictions of, appalling blunders, 87;
responsible for, 92;
to committee of newspaper proprietors, 115-16;
yields to newspaper demand, 117

Select Committee on Post Office Servants, Composition of, and
reference to, 243;
asks for reappointment, 244

Service, Mr. Scudamore's standards of, 45-48

Service, Change in conditions of, resisted, 351-53

Shares, Proposed way of selling, 56

Shaw Lefevre, G. J., on the reduction of the tariff on telegrams,
108-10

Shehan, D. D., Intervention by, 297

Shephard, J., Complaints of, before Tweedmouth Committee, 289-90,
295-96

Sloan, T. H., Intervention by, 300-1, 313

Smith, J. S., on the Webster case, 307;
on Woodhouse case, 310-11

Smith, Llewellyn, member of Tweedmouth Committee, 164, 165, 177

Smith, W. H., on the purchase of the telegraphs, 60

Smyth, Thomas, Intervention of, for Thomas Reilly, 308

Sorters of foreign letters, Option of vested interest for, 332-33;
complaint from second class, 333

Speculator and dividend seeker, The mere, 37

Split duties, Complaint about, 155

Sporting messages sent gratuitously, 125;
to so-called hotels, 126

Staff appointments the salt of the Service, 271n

Staff of men highly trained in the school of competition, 5

Stanley (of Alderly), Lord E. J. S., ordered report on Post Office
Telegraph Service, 13;
on Bradford Committee's Report, 222-24, 229-30;
would not receive circulars from members of House, 223;
cost of recommendations, 224, 230;
made own investigation and granted increased pay, 225, 230;
would bear responsibility, 233;
congratulated on his retirement, 244;
on promotion for merit, 301;
on dual duty, 347

Stansfeld, James, on difference between public and private
establishment, 248-49

State, Result of extending the functions of the, 12

State employment means life employment, 247

Statistics of telegraph lines and facilities, 42-45

Steadman, W. C., demands a Select Committee on causes of complaint,
187;
motion lost, 189;
moved reduction of Postmaster General's salary, 189;
lost, 193;
third demand, 193;
lost, 198;
cites special cases of grievance, 195-96;
on this question business, 315-16

Stephenson, Sir Wm. H., on dismissal of State servants, 247-48;
on cost of pensions of incompetents, 263;
on promotions, 268

Superannuation Act, Committee on operation of, 262

Swiss experience, 24-26, 28

Switzerland, Reports on users of telegraph in, 17;
effect of reduction of rates, 18;
telegraph introduced in, 38;
appropriated by the Government, 38;
statistics, 42;
increased use in, 51;
telegrams to inhabitants in, 53

Table of ages and wages of provincial telegraphists, 141n

Tariff on telegrams reduced, 91, 92;
cut almost in two, 109;
Government should have resisted vote to cut in two, 379

Tariffs and growth of traffic, 50-53

Taylor, postman of Sterling, Case of, 195

Telegrams, Proportion of, to letters sent, 18;
tariff on, reduced by House of Commons, 91, 92;
cut almost in two, 109

Telegraph of no use in times of peace, 37

Telegraph clerks, Lack of knowledge of technics by, 270-71;
demanded reduction of hours, 328;
intervention for at Halifax, 348

Telegraph companies, Indictment of, 15;
proposal of the, 56;
unpopular, 61;
sums to be paid to, 72n

Telegraph deficit, Aggregate, 90;
Parliament responsible for, 91-92

Telegraph Department, Report on deficits in, with statistics,
110-11, 181;
not earning operating expenses, 220

Telegraph employees, Good-will of, purchased out of public purse,
380

Telegraph lines, Cost of rearranging and extending, 45, 49;
estimated, 58

Telegraph messages, and revenue from, 104-5, 111n

Telegraph offices in United Kingdom, 19;
non-paying, 102n

Telegraph service, Extension of, 77-80;
actual cost, 78

Telegraph stations, Number of, in 1865, 44;
distances from Post Office, 47;
open to the public, 81n;
number of increased, 104

Telegraph systems of United Kingdom and those of Belgium and
Switzerland, Distinction between, 36;
comparative use of, 51-52

Telegraphists, Average weekly wages paid to, by companies,
127-28;
wages increased after transfer to Post Office, 129;
Lord Cavendish on organized agitation by, 133-34;
table of ages and wages of, 141n;
Earl Compton on grievances of the, 143;
cost of concessions to, 145, 172;
promotion of, blocked, 153-54;
demand of, 155-56;
neglected to improve themselves, 157;
false statements by, 158-60;
C. H. Kerry on work required of, 168-69;
maximum salary of, raised, 170-72;
complaints of, endorsed by A. K. Rollit, 174-76;
threaten to strike, 174;
concessions to, 180;
grievance of examination, 190;
charge of breach of contract, 194, 201-2;
senior, promoted from first class, 329;
by examination, 330-31;
first class complained of grievance, 331, 333;
increase in promotions, 334;
complaint, 334-35;
intervention for second class by H. L. W. Lawson, 336-37;
Capt. Norton intervenes for, 338;
demand amalgamation into a single class, 342-43;
reject opportunities and demand more pay, 344-45;
seek intervention to prevent transfer as sorters, 346-48;
grievances as to pensions, 356

Telegraphs, Purchase of the, 3, 57-76;
high price paid, 4-5;
estimated cost and revenue, 58;
terms of the purchase, 59-60;
Scudamore and Hunt on, 62-63;
estimated revenue, 63, 82;
transferred to Post Office Department, 75;
actual cost of to Government, 75;
cost of extension and rearrangement, 78-79;
earnings, 1880-81, 104;
become self-supporting, 104-5;
failed to earn operating expenses, 110;
might have remained self-supporting, 112;
subsidize newspaper press, 113-24;
rate charged, 117;
Committee on increased cost of service, 118-19;
subsidize pool-rooms, 124-26;
extension of, a purchase of votes out of the public purse, 379;
would yield a profit in hands of a commercial company, 386

Telegraphs more freely used in Switzerland and Belgium than in the
United Kingdom, 53, 81

Telephone, Competition from, 181

Telephone industry hampered by the State, 387-89, 392

Telephone royalties included in gross receipts, 89

_Times, The_, on Bradford Committee Report, 216-17

Tipping, E. J., on the Crompton case, 292

Towns, English and Welsh, Telegraphic facilities in, 486, 45-48

Trades union spirit, Development of a, 302-4

Tradesman, Small, did not use telegraph, 16

Traffic, Growth of, and tariffs, 50-53

Transit messages profitable in Belgium, 22;
in Switzerland, 24

Treasury, The, on Civil Service pressure, 132;
organization and work of the, 360-63;
power of public opinion on, 363-65;
power of, not exercised, 369, 370-71;
importance of, 377, 384

Treasury, Lords Commissioners of the, on accepting recommendations
of Tweedmouth Committee, 172-73

Trenan, E., on lack of knowledge of technics in telegraph clerks,
270

Tribunal, A permanent non-political suggested, 232

Turner, ----, Case of, 159

Tweedmouth Committee, Testimony before, 137, 141-42;
membership of, 163-64, 165;
Report, 165-81;
L. Hill before the, 166-67;
H. C. Fischer, 167-68;
C. H. Kerry, 168-69;
recommendations of, 170-72;
recommendations of accepted, 172;
sharply criticized by A. K. Rollit, 173-76;
a one-sided tribunal, 211;
did not give satisfaction, 218;
increase of expenses by, 221;
testimony showing leniency of Post Office Department with
offenders, 306-18;
special grievances cited to the, 289-91;
on risk allowances, 349;
on pay for letter sorters, 349-50;
on holidays, 350;
grievances laid before, 355-59;
evidence before, shows the visible helplessness of governments,
358-59

United Kingdom, Telegraph facilities in 1865, 43-44;
telegrams to inhabitants in, 53

United Kingdom Electric Telegraph Company, organized with uniform
tariff irrespective of distance, 29;
extent of lines, 30;
shilling rate abandoned, 31-32;
rates, 31n;
rates increased, 32

United Kingdom Telegraph Company, 40;
Government purchase of, 58

Universal Private Company, Property of, purchased, 73

Uren, J. G., on transfers of postmasters, 287;
on blocking officers by pensioners, 340

Vacancy, suburban, Interference in the filling of a, 299-300

Verney, Sir Harry, moves enfranchisement of revenue officers, 94

Vested rights doctrine of the Civil Service, 153, 155;
sundry, 349-51; 381

Vincent, Sir Edgar, on dismissal of incompetent officers, 259-60

Wages and salaries of employees raised by political pressure, 91-92,
105, 110, 137-40;
caused decrease of revenue, 109;
average weekly, paid to telegraphists by companies, 127-28;
increase in after transfer to Post Office, 129;
Fawcett revision of, 131;
Lord Cavendish on, 133-34;
Raikes revision of, 140-47;
increased expenditures from, 160-61, 172, 180;
no justification for raising maximum, 168;
Tweedmouth Committees' recommendations on, 170-71;
adopted, 172;
further raise of, by Norfolk-Hanbury Committee, 180;
cost of, 180-81;
continued pressure for increase, 182-213;
comparative, 230

Walker, J. R., passed over, 291

Walpole, Spencer, member of Tweedmouth Committee, 163, 165, 177;
on punishment of a postman for intoxication, 311;
on Roberts case, 309;
on Worth case, 312;
on the malingerers' grievance, 358

Ward, J., member of Select Committee, Intervention by, 316-17

Wastefulness of the Government's operation, 5;
inherent, 103;
diminution of, 104

Weaver, H., on the newspaper tariff, 118-19

Webster, letter carrier, disciplined for misconduct, 307-8

Welby, Sir Reginald E., Testimony of, before Royal Commission on
Civil Service pressure, 137-38;
on power to remove incompetent employees, 251-53, 259;
on probationary period, 260-61;
on pensions, 263;
on abolition terms, 264;
on a six or seven hour day, 325-26;
on vacations, 351;
on power of public opinion on Treasury control of expenditures,
363-65;
on power of Treasury to limit number of clerks, 370-71

West, Sir Algernon E., Testimony of, before Royal Commission on
Civil Service pressure, 138-39;
result of reorganization made by, 265;
on promotion by merit, 273-74

Whips, Government, 361-62

Whitehall system of inspection inefficient, 320-22

Wiles, T., Intervention by, 317

Wireless telegraphy restricted from competition with government
telegraph monopoly, 389-90

Women telegraphists, Promotion of, questioned, 293-94

Wood, ----, Interference in behalf of, 294-95

Wood, Sir Charles, on reduction in number of Junior Lords, 362

Woodhouse, ----, postman at Norwich, Case of, 310-11

Woods, Samuel, Motion of, for right to agitate, 183-87;
lost, 187

Work, Maximum of, provided for, 219

Writers and their importance, 353-54

Wykes, ablest man in Sheffield office, displaced after promotion,
283, 305, 381

Transcriber Note:
Italics are rendered between underscores, e.g. _italics_.
Small caps are rendered as ALL CAPS.
Other changes made by the transcriber are listed below.

Transcriber's change table
+------+---------------+---------------+
|image |as printed |changed to |
|------+---------------+---------------+
| 50 |premanent |permanent |
| 121 |augumented |augmented |
| 172 |extraordinarly |extraordinarily|
| 214 |unbiassed |unbiased |
| 319 |indefinately |indefinitely |
| 345 |Commissoin |commission |
| 438 |486 |48n |
+----------------------+---------------+

*** End of this LibraryBlog Digital Book "The British State Telegraphs - A Study of the Problem of a Large Body of Civil Servants in a Democracy" ***

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